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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )

þ Filed by the Registrant ¨ Filed by a party other than the Registrant
   
CHECK THE APPROPRIATE BOX:
¨ Preliminary Proxy Statement
¨ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material under §240.14a-12

STARBUCKS CORPORATION

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
þ No fee required.
¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  1) Title of each class of securities to which transaction applies:
  2) Aggregate number of securities to which transaction applies:
  3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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¨ Fee paid previously with preliminary materials.
¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  1) Amount Previously Paid:
  2) Form, Schedule or Registration Statement No.:
  3) Filing Party:
  4) Date Filed:

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  To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
     
  With our partners, our coffee and our customers at our core, we live these values:
     
    1 Creating a culture of warmth and belonging, where everyone is welcome.
     
    2 Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
     
    3 Being present, connecting with transparency, dignity and respect.
     
    4 Delivering our very best in all we do, holding ourselves accountable for results.
     
    We are performance driven, through the lens of humanity.

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Notice of Annual Meeting of Shareholders
When   Where   Record Date
March 16, 2022, Wednesday,
at 10:00 a.m. (Pacific Time)  
  Via Webcast.
www.virtualshareholdermeeting.com/SBUX2022
  Shareholders as of January 6, 2022, are entitled to vote at the meeting  

ITEMS OF BUSINESS

      BOARD VOTING   PAGE REFERENCE
PROPOSAL     RECOMMENDATION   (FOR MORE DETAIL)
Management Proposals          
To elect the 11 directors named in this proxy statement   FOR each director nominee   25
           
To approve the amendment and restatement of our 2005 Long-Term Equity Incentive Plan   FOR   44
           
To approve, on a nonbinding, advisory basis, the compensation paid to our named executive officers (“say-on-pay vote”)   FOR   52
           
To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022   FOR   88
Shareholder Proposal          
To consider and act upon the shareholder proposal described in this proxy statement, if properly presented at the Annual Meeting (as defined below). The shareholder proposal requests:          
●    Annual reports regarding the prevention of harassment and discrimination in the workplace   AGAINST   90

Shareholders will also transact such other business as may properly come before the annual meeting of shareholders to be held on March 16, 2022 (the “Annual Meeting”), or any adjournment or postponement thereof.

Voting   Attending the Annual Meeting
Your broker will not be able to vote your shares with respect to any of the matters presented at the meeting, other than the ratification of the selection of our independent registered public accounting firm, unless you give your broker specific voting instructions.  

Shareholders may view and listen to a live webcast of the meeting. The webcast will start at 10:00 a.m. (Pacific Time). See our Investor Relations website at http://investor.starbucks.com.

You do not need to attend the Annual Meeting to vote if you submitted your proxy in advance of the meeting.

We are committed to ensuring, to the extent possible, that shareholders will be afforded the ability to participate at the virtual meeting similarly to how they would participate at an in-person meeting. The question and answer session will include questions submitted in advance of, and questions submitted live during, the Annual Meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in with your unique 16-digit control number (“Control Number”) found on your proxy card or voting instruction form (“VIF”). Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/SBUX2022.

We encourage you to access the Annual Meeting before it begins. Online check-in will start approximately thirty minutes before the Annual Meeting begins at 10:00 a.m. (Pacific Time) on March 16, 2022. If you have difficulty accessing the meeting, please call 1-844-986-0822 (toll free) or 303-562-9302 (international). Technicians will be available to assist you.

YOUR VOTE IS VERY IMPORTANT. Even if you plan to attend our Annual Meeting, please cast your vote as soon as possible. Make sure to have your proxy card or VIF in hand.

2022 PROXY STATEMENT    1


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By internet
go to www.proxyvote.com;
  By toll-free telephone
from the United States, U.S. territories, and Canada: call 1-800-690-6903;
  By mail (if you received a paper copy of the proxy materials by mail): mark, sign, date, and promptly mail the enclosed proxy card in the postage-paid envelope; or   By scanning the QR code using your mobile device.

Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting as your proxy is revocable at your option. Whether or not you participate in the Annual Meeting, it is important that your shares be part of the voting process. You may log on to www.proxyvote.com and enter your Control Number to vote your shares. You can also vote in advance of or during the meeting. If you attend the Annual Meeting virtually, please follow the instructions at www.virtualshareholdermeeting.com/SBUX2022 to vote or submit questions during the meeting.

Jennifer L. Kraft
senior vice president, deputy general counsel and secretary

Starbucks Corporation
2401 Utah Avenue South
Seattle, Washington 98134
January 28, 2022

  Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on March 16, 2022. Our proxy statement follows. Financial and other information concerning Starbucks is contained in our Annual Report on Form 10-K (the “Annual Report”). The Notice of Annual Meeting, proxy statement, and Annual Report are available on our Investor Relations website at http://investor.starbucks.com. Additionally, you may access our proxy materials at www.proxyvote.com, a site that does not have “cookies” that identify visitors to the site.

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 1
LETTER TO OUR SHAREHOLDERS 5
FISCAL 2021 BUSINESS HIGHLIGHTS 7
   
PROXY SUMMARY 9
Board Highlights 9
Shareholder Engagement 12
Executive Compensation Advisory Vote 13
Global Environmental and Social Impact 14
   
PROXY STATEMENT 23
Voting Information 23
PROPOSAL 1 - ELECTION OF DIRECTORS 25
Starbucks Board of Directors 25
   
CORPORATE GOVERNANCE 31
Board Structure and Responsibilities 31
Board Oversight of Strategy 32
Role of our Board Committees 35
Attendance at Board and Committee Meetings, Annual Meeting 35
Audit and Compliance Committee 36
Compensation and Management Development Committee 37
Nominating and Corporate Governance Committee 38
Our Director Nominations Process 39
Certain Relationships and Related Person Transactions 40
Corporate Governance Materials Available on the Starbucks Website 41
Contacting the Board of Directors 41
   
COMPENSATION OF DIRECTORS 42
Fiscal 2021 Compensation Program for Non-Employee Directors 42
Fiscal 2021 Non-Employee Director Compensation Table 43
   
PROPOSAL 2 - APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN 44
   
PROPOSAL 3 - ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION 52
   
EXECUTIVE COMPENSATION 53
   
COMPENSATION DISCUSSION AND ANALYSIS 53
Executive Summary 53
EXECUTIVE COMPENSATION TABLES 80
Summary Compensation Table 80
Fiscal 2021 All Other Compensation Table 81
Fiscal 2021 Grants of Plan-Based Awards Table 81
Outstanding Equity Awards at Fiscal 2021 Year-End Table 83
Fiscal 2021 Option Exercises and Stock Vested Table 84
Nonqualified Deferred Compensation 85
Fiscal 2021 Nonqualified Deferred Compensation Table 85
Potential Payments Upon Termination or Change in Control 86
CEO Pay Ratio 87
   
PROPOSAL 4 - RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 88
Independent Registered Public Accounting Firm Fees 88
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm 89
Audit Committee Report 89
   
PROPOSAL 5 - REGARDING ANNUAL REPORTS REGARDING THE PREVENTION OF HARASSMENT AND DISCRIMINATION IN THE WORKPLACE 90
Shareholder Proposal Regarding Annual Reports Regarding the Prevention of Harassment and Discrimination in the Workplace 90
Supporting Statement 90
Board Recommendation 90
   
STOCK OWNERSHIP 92
Equity Compensation Plan Information 92
Beneficial Ownership of Common Stock 93
   
ADDITIONAL INFORMATION 95
Expenses of Solicitation 95
Internet Voting 95
Internet Availability of Annual Meeting Materials 95
Proposals of Shareholders 95
Director Nominations for Inclusion in Starbucks Proxy Materials (Proxy Access) 95
Shareholders Sharing the Same Address 95
Annual Report to Shareholders on Form 10-K 96
Other Business 96
   
APPENDIX A – NON-GAAP MEASURES A-1
   
APPENDIX B – AMENDED AND RESTATED 2005 LONG-TERM EQUITY INCENTIVE PLAN B-1
   
ADMISSION REQUIREMENTS FOR THE STARBUCKS CORPORATION 2022 ANNUAL MEETING OF SHAREHOLDERS See outside
back cover


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements. All statements contained in this proxy statement other than statements of historical fact, including statements relating to trends in or expectations relating to the expected effects of our initiatives, strategies, and plans, as well as trends in or expectations regarding our financial results and long-term growth model and drivers, and regarding our business strategy and plans and our objectives for future operations, are forward-looking statements. The words ‘”can,” “believe,” “may,” “will,” “continue,” “anticipate,” “intend,” “expect,” “seek,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the Securities and Exchange Commission, including the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended October 3, 2021. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this proxy statement may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results. We assume no obligation to update any of these forward-looking statements after the date of this proxy statement.

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To Our Shareholders

The past two years of this global pandemic have stress-tested companies of all sizes and in all industries. The good news is that Starbucks was built for this moment.

Starbucks rose to the occasion as we adapted to the unknown. When society was confronted with forced disconnections, we stayed true to our Mission while continuing to serve communities around the globe. Our heartfelt appreciation goes out to our store partners (employees) who proudly wear the green apron and our loyal customers who craved our coffee and our connections.

As a company with a 50-year history built on bringing together people and communities, Starbucks is perfectly positioned to take advantage of the Great Human Reconnection that has already begun.

We are responding to these unprecedented times by investing in our people, caring for our planet, and staying committed to growth-at-scale. This people-positive, planet-positive, and profit-positive agenda worked in harmony prior to COVID-19; worked in harmony during the pandemic; and will work and thrive in a post-COVID world.

Enhancing the well-being of all we touch

Between our partners, customers, farmers, suppliers, and those who live in the communities we serve, Starbucks is expected to touch the lives of one billion people—one eighth of the world’s population—by 2030. We are excited by this awesome responsibility and believe success will be achieved by promoting opportunity, through supporting inclusion, and by strengthening every community we serve.

Our partners create the Starbucks Experience that uplifts our customers and drives their love for our brand. Whenever we invest in our people, it pays off.

For example, in our early years, we provided health insurance for hourly employees and granted them ownership in the form of stock (Bean Stock) to make the word “partner” ring true. We later created the Starbucks College Achievement Plan to help eligible U.S. partners earn a bachelor’s degree with 100% upfront tuition coverage through Arizona State University’s online degree program. More than 7,500 partners have since graduated and more than 20,000 are in college today.

Over the course of fiscal 2021 and by the end of the summer of 2022, Starbucks will have invested approximately $1 billion in annual wages and training—boosting the pay of tenured partners, baristas, and shift supervisors to drive the average pay for all U.S. hourly partners to $17/hour by the end of this summer. Our industry-leading workforce retention underscores the power of this investment. We are also supporting the individual career journeys of our people with more mentorship opportunities, on-site training, paid leave, and childcare benefits.

At Starbucks, inclusion and belonging must be everyday realities—on both sides of the counter and in our corporate support center as well. Since math has no opinion, we are tracking diversity goals with transparency and intentionality. By 2025, we want 30% of our corporate workforce and at least 40% of our retail and manufacturing jobs to be represented by those who are Black, Indigenous, and People of Color (“BIPOC”). This goal is supported by a new mentorship program connecting BIPOC partners to senior leaders; advanced tools that monitor internal talent advancement; and a clear focus on store accessibility for both partners and customers. Executive compensation is now tied to expected outcomes because our success or failure in these areas ultimately effects our bottom line.

We are proud Starbucks has achieved a perfect score on the Disability Equality Index (DEI) once again in 2021. Additionally, since 2018, our company has maintained 100 percent pay equity for women and men and people of all races performing similar work in the U.S. And we have not stopped there. Our efforts have continued around the world—reaching the same outcome in China in 2019. Similarly, our licensed partners in Singapore, the Philippines, and India achieved gender pay equity in 2020.

Being people positive also means strengthening the areas where we operate. The Starbucks Foundation, a 501(c)(3) charitable organization, provides Neighborhood Grants to groups nominated by our partners—those who know their communities best. The Starbucks Foundation also offers assistance to coffee- and tea-growing communities around the globe including grants and disaster relief.

We have opened over 20 of the 100 Community Stores that we have planned to boost the economies of underserved rural and urban areas across the U.S. We have also opened four community stores in Asia.

Our commitment to the planet

We are motivated by our 2020 pledge to give back more to the environment than we take from it. Our stated goals are to halve water use, carbon emissions, and waste from direct Starbucks operations by 2030. Our growing plant-based food and dairy alternatives enhance our menu and help our planet. We are collaborating with farmers to help refine and scale an approach to sustainable dairy. Additionally, we have plans to build or retrofit more than 10,000 stores globally within the Greener Stores Framework developed in partnership with the World Wildlife Fund.

All of these investments enhance our ability to generate profits which, in turn, allow us to invest in people and in the planet—a virtuous circle.

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LETTER TO OUR SHAREHOLDERS

Continued growth at scale

Over the past four and a half years, Starbucks market capitalization has more than doubled. And still, the total global addressable coffee market is expected to eclipse $400 billion in the next three years. That represents an 8-9% compound annual growth rate. With our scale and vision, we can grow even faster.

By focusing on consumer behavior, we can innovate new beverage platforms, expand digital customer relationships, and create new store formats. We can introduce the Starbucks Experience to a growing number of customers and satisfy their shifting preferences.

Our opportunity ahead

“To inspire and nurture the human spirit, one person, one cup, and one neighborhood at a time,” has long been our Mission. This mission hasn’t changed in a pandemic; it’s only grown in importance. In every market around the world, we observe customers craving human connection with that familiar phrase: “Meet me at Starbucks.” Our partners, cafes, and great coffee are foundational to so many narratives—from first dates to job interviews to daily get-togethers. With nearly 34,000 stores and a presence in 84 markets worldwide, Starbucks is interwoven into the fabric of our lives.

People depend on Starbucks which is an awe-inspiring responsibility and ever-expanding opportunity. Together, in partnership with all of our stakeholders, we are up to the challenge.

With Respect and Gratitude,

Mellody Hobson
independent chair of the board
Kevin R. Johnson
president and ceo

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Fiscal 2021 Business Highlights

Starbucks is the premier roaster, marketer, and retailer of specialty coffee globally, with a presence in 84 markets worldwide. Since 1971 we have been committed to ethically sourcing and roasting high-quality arabica coffee. Through over 33,800 specialty retail stores and a growing presence in consumer packaged goods, we bring the unique Starbucks Experience to life for every customer in every cup.

As Starbucks celebrated its 50th anniversary year, the Company delivered record results in fiscal 2021, while facing unprecedented operating complexities as a result of the COVID-19 pandemic. As markets reopened, Starbucks ability to meet customers where they are and foster authentic human connections drove a strong business recovery.

Through strength and resiliency—led by our green apron partners—Starbucks achieved record business results in fiscal 2021, far surpassing pre-COVID-19 levels.

2021 Business Highlights

Strategic Investments Prioritizing Partners Sales Strength and Recovery
     

   Accelerated our store portfolio transition through our North America Trade Area Transformation, repositioning over 500 stores in the U.S. to optimal locations with favorable economics

   Elevated the Starbucks Experience through strong operational improvements and innovation, including our more efficient Mastrena II espresso machine and investments in our artificial intelligence platform, Deep Brew, to personalize customer offers, and automate daily inventory management

   Announced historic partner investments, committing to a $15/hour floor for our U.S. company-operated store partners. Continued COVID-19 benefits, including vaccine pay, increased backup child or adult care, extension of catastrophe pay, and food and beverage benefits

   In China, invested meaningfully in our partners through unprecedented benefits, including healthcare for partners and their parents, rent assistance, and programs to offer career paths for young people in rural and remote provinces

   Global comparable store sales increased 20%, inclusive of a 10% increase in average ticket

   In the U.S., achieved 7% two-year comparable store sales(1) growth, reflecting strong demand for premium beverages and record food attach, and in China, 17% comparable store sales growth reflecting a strong recovery despite a volatile operating environment

     

(1) Two-year comparable store sales growth is calculated as ((1 + % change in comparable store sales in FY20) * (1 + % change in comparable store sales in FY21)) - 1. Two-year comparable store sales growth for the U.S. of 7% = ((1 + (-12%)) * (1 + 21%)) - 1.

Building the Brand

Global Reach Elevating the Customer Experience Relevant Beverage Innovation

   Increased digital reach with 90-day active Starbucks Rewards members reaching nearly 25 million members in the U.S. and nearly 18 million members in China

   To attract and retain high-quality talent to elevate our customer experience, the Company provided a wage increase of at least 10% for baristas, shift supervisors, and café attendants hired on or before September 14, 2020, invested in forecasting capabilities to improve staffing, offered referral bonuses, and added recruiting specialists across U.S. markets

   Increased our portfolio of drive-thrus and expanded accepted payment methods—including Bakkt app, PayPal, and reload capabilities with a range of cryptocurrency options—to meet customers where they are

   Cold beverages resonated strongly with customers, representing 75% of total U.S. beverage sales in the final quarter of fiscal 2021

●   In the U.S., introduced new non-dairy iced shaken espresso beverages and rolled out oatmilk nationwide

   In Japan, launched a 47 Jimoto Frappuccino® blended beverage series to celebrate Japan’s 47 different prefectures and Starbucks 25th anniversary in the market  

     

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FISCAL 2021 BUSINESS HIGHLIGHTS

FISCAL 2021 Results

Total Consolidated Revenues grew
21% year-over-year to
Expanded global
retail store base 4% to
Total Consolidated EPS
grew 348% year-over-year
to
U.S. active Starbucks® Rewards
members grew 28% year-over-year to
       
$29.1 Billion 33,833 stores $3.54* 24.8 Million
  Total Consolidated non-
GAAP EPS grew 177%
year-over-year to
China active Starbucks® Rewards
members grew 33% year-over-year to
  $3.24** 17.9 Million

* Includes a $0.56 gain on the divestiture of our South Korea joint venture and $0.10 related to the 53rd week in fiscal 2021.

** Includes $0.10 related to the 53rd week in fiscal 2021. Appendix A includes a reconciliation of non-GAAP EPS to diluted net earnings per share (“EPS”), the most directly comparable measure reported under accounting principles generally accepted in the United States (“GAAP”).

Shareholder Returns

With focus, discipline, and a growth mindset, Starbucks achieved strong fiscal 2021 results and is building on that momentum while making strategic investments to position itself well for future growth.

Starbucks returned $2.1 billion of capital to shareholders in fiscal 2021 through dividends. The Company temporarily suspended its share repurchase program in March 2020 to offset the impacts of COVID-19 and the suspension extended through fiscal 2021. Due to our business recovery and restoration of certain leverage metrics, we have resumed our share repurchase program in the first quarter of fiscal 2022.

Cumulative Total Shareholder Return as of October 3, 2021

     
1-year 5-year 10-year
     
+36% +130% +616%
     

Starbucks has returned a total of

$17.7 Billion

in capital to shareholders in the last three years

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Proxy Summary

This summary highlights information contained in the proxy statement. This summary does not contain all the information that you should consider, and you should read the entire proxy statement before voting.

BOARD HIGHLIGHTS

Director Nominees

The following tables provide summary information about our director nominees. Directors are elected annually by a majority of votes cast. Your board of directors recommends that you vote “FOR” the election of each of the 11 nominees. Please see page 25 in this proxy statement for this proposal.

          Committee Memberships
Name & Principal Occupation Age Director
Since
Independent Audit and
Compliance
Committee
Compensation
and Management
Development
Committee
Nominating
and Corporate
Governance
Committee
Richard E. Allison, Jr.
Chief Executive Officer and Director of
Domino’s Pizza, Inc.
54 2019  
Andrew Campion
Chief Operating Officer of
NIKE, Inc.
50 2019  
Mary N. Dillon
Executive Chair and Retired Chief Executive
Officer of Ulta Beauty, Inc.
60 2016  
Isabel Ge Mahe
Vice President and Managing Director of
Greater China of Apple, Inc.
47 2019  
Mellody Hobson
Co-Chief Executive Officer, President, and
Director of Ariel Investments, LLC
52 2005        
Kevin R. Johnson
president and chief executive officer of
Starbucks Corporation
61 2009        
Jørgen Vig Knudstorp
Executive Chairman of
LEGO Brand Group
53 2017  
Satya Nadella
Chief Executive Officer and Director of
Microsoft Corporation
54 2017    
Joshua Cooper Ramo
Chairman and Chief Executive Officer of
Sornay
53 2011  
Clara Shih
Chief Executive Officer & General Manager of
Service Cloud of Salesforce.com, Inc.
40 2011    
Javier G. Teruel
Retired Vice Chairman of Colgate-Palmolive
Company
71 2005  
       
  Member             Chair of the Board             Committee Chair             Audit Committee Financial Expert
               

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PROXY SUMMARY

Board Nominees Snapshot

EXPERIENCE/QUALIFICATIONS/SKILLS/ATTRIBUTES

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PROXY SUMMARY

BOARD INDEPENDENCE BOARD AND COMMITTEE
MEETINGS IN FISCAL 2021
DIRECTOR ELECTIONS

Independent Board Committees: All

Independent Director Nominees

 

 

 

 

75

Mandatory
Retirement Age

6

Independent
Director-Only Sessions


9

Audit and Compliance (“ACC”)


6

Compensation and
Management Development
(“CMDC”)


5

Nominating and
Corporate Governance (“NCGC”)


ANNUAL

Frequency of Board Elections

MAJORITY

Voting Standard for Uncontested Elections

 

     

Independent Chair of the Board:

Mellody Hobson

6 FULL BOARD MEETINGS

Proxy Access for Director Nominations

3 years    Holding Period

3%       Ownership Threshold

Nominees
Greater of 2 or 20% of board

Group Formation
Up to 20 shareholders

 

 

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PROXY SUMMARY

SHAREHOLDER ENGAGEMENT

Starbucks has a history of actively engaging with our shareholders. We believe that strong corporate governance should include year-round engagement with our shareholders.

We have a long-standing, robust shareholder outreach program through which we solicit feedback on our corporate governance, executive compensation program, disclosure practices, and environmental and social impact programs and goals. Investor feedback is shared with our board of directors as described below.

Corporate Governance Cycle

Publish Annual Report and proxy statement Conduct active outreach with top investors to discuss items to be considered at the Annual Meeting Annual Meeting Review vote results from our most recent Annual Meeting Share investor feedback with board of directors Evaluate proxy season trends, corporate governance best practices, regulatory developments, and our current practices Inform stakeholders, including investors, about recent developments relating to environmental, social, and corporate governance (“ESG”) topics through multi-media resources Conduct active outreach with top investors to understand their priorities, including with respect to executive compensation and ESG Share investor feedback with the board of directors

2021 Outreach

Engagement Participants Topics
     

As part of our regular shareholder outreach, we engaged with 13 of our top 20 shareholders in 2021, representing over 30% of our total shares outstanding. We also engaged with the proponent who submitted the shareholder proposal included in this proxy statement to more fully understand the proposal and why it was submitted.

Response to Shareholder Feedback

In response to our 2021 say-on-pay advisory vote outcome and the feedback we received from our shareholders about our executive compensation program, the Compensation Committee confirms that it does not intend to make future special awards to our continuing executive officers outside of our ongoing annual incentive programs except in connection with new hires and promotions. Among other changes, we have also provided enhanced disclosure around the achievement of the 2021 annual incentive awards in our Compensation Discussion and Analysis (“CD&A”). For additional information about the feedback we heard from shareholders and the actions we took in response, please see the Key Themes from Shareholder Engagement section in the CD&A on page 55 of this proxy statement.

Outreach was conducted by a cross-functional
team including:

   Members of the Starbucks Board of Directors

   Investor Relations

   Partner Resources Organization, including Global Total Rewards

   Law and Corporate Affairs

   Inclusion and Diversity

   Public Affairs

   Global Social Impact

   Global Environmental Sustainability

   Global Public Policy

   Global Coffee Tea and Cocoa

Additionally, our ceo and cfo engage in meaningful dialogue with our shareholders through our quarterly earnings calls and investor-related outreach events. 

Key areas of discussion included:

   Corporate Governance

   Executive Compensation

   Inclusion and Diversity

   Human Capital Management

   Sustainability Programs

   Supply Chain

   Human Rights

   Company Policy

   Brand/Public Affairs

   Risk Management

   Long-term Growth Strategy

   Financial Performance

   Animal Welfare

     
     

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PROXY SUMMARY

EXECUTIVE COMPENSATION ADVISORY VOTE

Our board of directors recommends that shareholders vote to approve, on a nonbinding, advisory basis, the compensation paid to the Company’s named executive officers (“NEOs”), as described in this proxy statement, for the following reasons. Please see page 52 of this proxy statement for this proposal.

Pay Delivery Aligned with Performance

Based on effective program design and best practices, and consistent with our pay-for-performance philosophy, our executive compensation is aligned with Company performance. The vast majority of compensation value we deliver to our executives is in the form of compensation that is variable and “at-risk” based on performance.

CEO
Compensation
Mix
 
   
Other NEOs* Compensation
Mix
 
   
* Excludes Ms. Brewer and Mr. Grismer who ceased employment with the Company in February 2021 and May 2021, respectively.

Strong Governance Standards and Best Practices

The Compensation and Management Development Committee (“Compensation Committee”) of our board of directors is fully engaged to respond to the dynamic business environment in which we operate. As discussed in the CD&A section of this proxy statement, the Compensation Committee acts to:

Adapt our compensation program to match the needs of our business
Attract and retain top talent in a dynamic and challenging business environment
Foster long-term shareholder value creation and pay-for-performance alignment by creating meaningful equity incentives linked to rigorous financial objectives
Mitigate compensation-related risk to the organization
Conduct an annual say-on-pay advisory vote and regularly engage with shareholders on executive compensation

Effective Program Design

Competitive total rewards package benchmarked against comparable peers
Vast majority of executive pay based on performance, primarily in the form of stock-based compensation
Combination of absolute and relative performance metrics in incentive programs
Promotion of retention through multi-year vesting of stock awards
Stock ownership policy, including rigorous share ownership requirements
Clawback policy that covers cash and equity and is beyond what is required by the Sarbanes-Oxley Act of 2002
No fixed term or evergreen employment agreements; No severance agreements
Incorporation of ESG goals into our short-term and long-term incentive plans (including inclusion and diversity goals)
Double-trigger equity acceleration upon a change-in-control
No hedging, pledging, short sales, or derivative transactions in Starbucks stock
No tax gross-ups upon a change-in-control or on perquisites or benefits
No excessive executive perquisites
No executive pension plans or supplemental executive retirement plans

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GLOBAL ENVIRONMENTAL AND SOCIAL IMPACT

People, Planet, and Profit Positive

At Starbucks, we aspire to be people positive, planet positive, and profit positive, living our Mission and Values while working together as partners to build a different kind of company. In our next 50 years, we aspire to create change with lasting positive impact—giving more than we take from the planet, creating a sustainable future for coffee, positively impacting the communities we serve, and enhancing the well-being of all who connect with Starbucks.

Key to our success is investing in people, especially our partners, so they in turn can support people in the communities we serve. Our 400,000 green apron partners around the world are the heartbeat of Starbucks. When we care for our partners, they care for our customers, and all stakeholders benefit.

 

Building a great business that scales for good also requires intention, transparency, and accountability. In fiscal 2022, we remain committed to incorporating metrics focused on building inclusive and diverse teams, protecting our planet, and developing our executive compensation program. This is how we continue to build an enduring company, one that is committed to the ideal that doing good for one another—and for our planet—is good for business over the long-term.

While our society continues to face unprecedented challenges—a historic global pandemic, extreme weather events, and racial and social injustice —Starbucks partners and our communities have remained resilient, rising to the occasion in support of one another. Now, more than ever, our success relies on how we partner together.

People

At Starbucks, we put people at the center. From our partners to farmers around the world to our neighbors, we aspire to create environments where everyone is welcome and feels a sense of belonging. We have always believed that our success should be shared, and we remain committed to providing an elevated experience for our partners. And we know that our success can be built upon to help our partners achieve their biggest dreams and to help our communities thrive.

We are committed to being people positive—a bold effort to enhance the well-being of all who connect with Starbucks, through actions and programs rooted in opportunity, inclusion, and community.

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OPPORTUNITY
We believe in creating meaningful opportunities for our partners—investing in their well-being, building a culture where everyone is welcome, and supporting their aspirations at Starbucks and beyond.
   

Compensation & Benefits

We take great pride in knowing we have pioneered innovative benefits for full- and part-time partners around the world. In the U.S., Starbucks benefits package is available to eligible partners who work at least 20 hours a week. It includes comprehensive and affordable health insurance, 100% college tuition coverage, equity in the form of stock, paid parental leave, and reimbursement for certain uncovered fertility services, adoption, and surrogacy expenses. In addition, all partners are eligible for child and adult back-up care, 20 no-cost mental health sessions each year, free Headspace subscriptions, and more. We also offer coverage for transgender procedures, which we developed in partnership with the World Professional Association for Transgender Health.

   
  The Starbucks College Achievement Plan (“SCAP”) is helping eligible U.S. partners complete their college education by receiving 100% upfront tuition coverage for a first-time bachelor’s degree through Arizona State University’s (“ASU’s”) online program. By the end of the first quarter of fiscal 2022, more than 7,500 partners will have graduated with degrees, and more than 20,000 partners are participating in over 100 of ASU’s online degree programs. Notably, 84% of company-operated Starbucks stores in the U.S. have at least one partner participating in SCAP, and 20% of partners participating are the first in their family to attend college. We are proud to continue to lead the way in providing opportunity for our partners.
   
  Internationally, we customize our compensation and benefits packages to remain competitive and responsive to partners’ feedback. For example, for partners in our company-operated stores across China, we offer a critical-illness insurance plan for their parents. We also work closely with our licensed markets to ensure they offer benefits relevant to partner needs.
   
  In fiscal 2021, Starbucks continued to invest in our partners, making one of the most substantial wage investments in the Company’s history. The investment increased pay rates, boosting the premium we already paid to exceed minimum wage in every market. This included:
   
  At least a 10% pay increase for baristas, shift supervisors, and café attendants hired on or before September 14, 2020.
     
  At least an 11% pay increase for tenured partners with three years of continued service.
     
  A continued investment in shift supervisor pay to recognize this critical leadership role and attract the best talent.
     
  At least a 5% increase to all starting pay rates to support store managers in continuing to attract and retain new talent.
     
  In the first quarter of fiscal 2022, Starbucks accelerated its annual pay increase to October 4, 2021, such that all hourly partners hired on or before July 4, 2021, received at least a 5% pay increase. Starbucks also announced an additional series of investments in wages, rewarding tenured partners and boosting average pay for all U.S. hourly partners. With this additional investment, partners with two or more years of service may receive up to a 5% raise, while partners with five or more years of service may receive up to a 10% raise, effective late January 2022. Additionally, in Summer 2022, average pay for all U.S. hourly partners will near $17/hour with all U.S. partners earning at least $15/hour.
   
  Once complete, this fiscal 2022 investment will reach approximately $1 billion in incremental investments in annual wages and benefits over the last two years.
   

Training & Educational Resources

We are committed to providing partners with opportunities for education, including the Third Place Development Series, which is designed to equip store managers and store partners with new tools for reflection and to facilitate discussions about important and challenging topics related to mental health, equity, inclusion, and bias. In addition, we offer the 15-course To Be Welcoming curriculum, which is available to U.S.-based partners, to foster an internal culture of equity and inclusion.

   
  In the first quarter of fiscal 2022, we made additional investments in store partner training, including a complete redesign of the Company’s “Barista Basics” guide for partners to include added training time for all roles, and an expansion of training stores around the country, dedicated entirely to training store partners.

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INCLUSION

We believe it is our responsibility to advance racial and social equity, and we are committed to furthering that work with intention, transparency, and accountability.

   

Continued Commitment to Diversity, Equity, and Inclusion

Each day we reaffirm our responsibility to one another—to care for each other, to strengthen our communities, and to ensure diverse perspectives are represented at the Company’s highest levels. Informed by conversations with partners and key stakeholders, in fiscal 2021, Starbucks launched a mentorship program to connect BIPOC partners to senior leaders, offered foundational inclusion and diversity learning modules, and embedded anti-bias content into all hiring, development, and performance assessment toolkits. We enhanced our tools for tracking internal talent advancement and opportunity, and continued to work closely with our Partner Networks (employee resource groups) to better understand and support the experiences of our partners and further develop them as leaders.

   
  We remain transparent in our approach to inclusion and diversity. In fiscal 2021, we released our third Civil Rights Assessment conducted by Covington and Burling LLP under the leadership of former U.S. Attorney General Eric Holder, Jr.
   

Current Diversity

Starbucks continues its efforts to achieve 2025 representation goals, including achieving BIPOC representation of at least 30% at all corporate levels and at least 40% in all retail and manufacturing roles.

 

                      U.S. BY RACE/ETHNICITY U.S. BY GENDER
   
  U.S. BY RACE/ETHNICITY
 

 

  Upon the completion of fiscal 2021, the Starbucks U.S. partner base was 71.3% female and 48.2% BIPOC. Breaking down our BIPOC representation further, our partners are 7.7% Black, 28.5% Hispanic or Latinx, 5.9% Asian, 4.8% Two or More Races, 0.6% American Indian or Alaskan Native, and 0.5% Native Hawaiian or Other Pacific Islander. To promote transparency and open dialogue, Starbucks disclosed its EEO-1 data for the years 2016 through 2020, and we plan to disclose our Consolidated EEO-1 Report for 2021 effective upon our next submission to the U.S. Equal Employment Opportunity Commission in 2022.

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LGBTQ+
Starbucks is recognized as a top employer for LGBTQ+ workplace equality. In 2021, for the 11th time overall and the 8th consecutive year, we achieved a 100% rating from the Human Rights Campaign’s Corporate Equality Index based on corporate policies and practices for LGBTQ+ equality.
   

Disability Inclusion

Starbucks is committed to enhancing the accessibility of the Starbucks Experience for partners and customers. We are proud to be recognized for our inclusion policies and practices related to people with disabilities. In 2015, 2016, 2017, 2019, and 2021, Starbucks scored 100 out of 100 on the Disability Equality Index and was recognized as a “Best Place to Work.” We are a member of Disability:IN’s Inclusion Works program, a national forum for peer institutions to share best and evolving practices on access and disability inclusion, and have signed on to Disability:IN’s pledge, Are You In, committing to advance disability inclusion in the workplace.

   
  Starting from the early stages of design, we strive to create accessible environments in our stores by employing universal design principles and in our digital world through the Starbucks app and accessible websites. In 2021, we began offering free Aira service, which provides visual interpreter service for blind and low-vision customers, and introduced new large-print and Braille menus in all stores in the U.S. and Canada. Starbucks also operates eleven Signing Stores, globally, that provide a space for the Deaf and hard of hearing community to connect through sign language and celebrate Deaf culture, with the most recent opening in China in the first quarter of fiscal 2022.
   

Hiring Efforts for Military and Refugees

We remain committed to hiring 5,000 military veterans annually and 10,000 refugees globally. Through fiscal 2020, we hired nearly 32,000 veterans and military spouses, and more than 2,600 refugees. We plan to continue welcoming new partners from communities that may experience barriers to employment, continuing our commitment to inclusion and equity for all partners.

   

Global Pay Equity

Starbucks is committed to reaching 100% gender pay equity for all partners in Starbucks company-operated markets globally. Starbucks has achieved and maintained 100% pay equity for women and men and people of all races performing similar work in the U.S. As of the end of fiscal 2021, median pay ratio in the U.S. was 100% for women and BIPOC.

   
  In fiscal 2021, we maintained gender equity in pay in our company-operated markets of Canada, China, and Great Britain. As of the end of fiscal 2021, the median pay for women globally was 100% of the median for men.
   
  In fiscal 2020, our licensed partners in Singapore, the Philippines, and India have achieved 100% pay equity for women and men, and we continue to work with licensed partners to prioritize gender pay equity in all markets.
   
  In addition, leveraging our experience working to achieve gender equity in pay in the U.S. and other markets, we have formulated pay-equity principles—equal footing, transparency, and accountability—as best practice that other employers can implement to help address known, systemic barriers to global pay equity.
   

COMMUNITY

We recognize a responsibility to strengthen our communities, and know Starbucks impact in communities is most meaningful when our efforts begin with our partners, who know their neighbors best.

   

Local and Community-Centric Economic Development

In the U.S., we have invested in 22 Community Stores, dedicated to providing economic opportunity in rural and urban communities across the country, adding one in the first quarter of fiscal 2022. We have also opened four Community Stores in Asia, with different areas of focus to support the communities we serve.

   
  In the U.S., we have invested in 78 Military Family Stores to help support service members, veterans, and military families. These stores are typically near military bases and are usually staffed by veterans and military family members. These store formats help us provide the best experience we can for customers, while also strengthening the communities we serve.
   

Impact Investments in Communities

In fiscal 2021, Starbucks executed its fiscal 2020 commitment to partner with Community Development Financial Institutions (“CDFI”) to invest $10 million in Chicago in small-business development loans with a focus on the city’s underserved communities.

   
  Building on this initiative, in fiscal 2021, Starbucks committed to invest $100 million in our Community Resilience Fund, an investment program focused on advancing racial equity and environmental resilience by supporting small business growth and community development projects in BIPOC communities in 12 U.S. metro areas and their surrounding regions, with a goal to have the total amount invested by 2025. As of January 11, 2022, Starbucks has issued $21 million in funding to seven CDFIs.
   

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Supplier Diversity & Inclusion

Since 1998, Starbucks has been committed to providing an environment where diverse suppliers who meet the requirements for quality, service, and value have an equal opportunity to compete for Starbucks business. By actively seeking a diverse range of suppliers, we support our business, strengthen our supply chain, and invest in the communities we serve. The Starbucks Supplier Diversity and Inclusion program drives inclusion of qualified businesses of all sizes. Starbucks has spent more than $8 billion with “Tier 1” (direct investment) diverse suppliers since 2000. In fiscal 2021, we spent nearly $800 million with Tier 1 diverse suppliers, which was 8.9% of the Company’s total spend in the U.S. and Canada.

   

Voting Resources

Starbucks believes no partner should have to choose between work and voting in every election. Starbucks continues to promote the importance of civic engagement, including making sure partners have the tools, resources, and time to vote. In July, Starbucks was proud to join others in urging Congress to update the Voting Rights Act to help ensure protection of the right to vote for all.

   

Hunger Relief Efforts

Since 2016, Starbucks has been committed to the fight against hunger through its innovative FoodShare program in partnership with Feeding America and other hunger-relief organizations, donating nearly 38.9 million nourishing, ready-to-eat meals to local food banks across the U.S. 100% of company-operated stores in the U.S. and Canada are now participating in the FoodShare program. In fiscal 2021, food donation programs expanded to international markets, including the United Kingdom, Japan, and Mexico, and Starbucks committed to reinvesting $100 million dollars in hunger relief over the next 10 years.

   
  In addition, Starbucks donated $1.7 million to Feeding America to advance equitable access to nutritious food, building on $2.69 million invested in food bank mobile pantry programs since 2019, and $45 million overall in hunger relief nationwide.
   

Community Champions

Starbucks partners are helping to uplift the communities we serve by volunteering and contributing directly to their local service organizations. In fiscal 2021, Starbucks launched an evolved community engagement program—Community Champions—to empower even more Starbucks partners to build community connections and make a positive impact in their neighborhoods. Even amidst a global pandemic, more than 15,200 partners around the world served as Community Champions in fiscal 2021, participating in more than 3,300 community events and donating more than 34,000 volunteer hours to local nonprofit organizations. Starbucks supports our partners’ efforts by matching up to $1,000 per partner annually for U.S. and Canada partners’ eligible contributions. This includes a match on financial contributions and a match for every hour of volunteer time donated to an eligible nonprofit organization. Through this effort, Starbucks contributed more than $1,000,000 to nearly 2,000 nonprofit organizations.

   

The Starbucks Foundation

Through donations from Starbucks, The Starbucks Foundation (the “Foundation”), a 501(c)(3) charitable organization established in 1997, helps strengthen humanity through catalytic philanthropic investments, building thriving communities, and providing relief to communities affected by disaster. The Foundation awarded more than $23 million in grants in fiscal 2021 to nonprofit organizations in our hometown of Seattle, in neighborhoods across the globe, and in coffee- and tea-growing communities around the world.

   

Empowering Women in Origin Communities

Since International Women’s Day 2018, the Foundation has been working toward empowering 250,000 women and girls in origin communities by 2025. This effort has already made a difference in the lives of more than 125,000 women in coffee- and tea-growing communities across Africa, Asia, and Latin America through programs offering skill development and training in women’s leadership, access to finance, and healthy homes.

   

Partner Inspired Giving

Our partners find meaningful ways to strengthen the communities we serve every day. The Foundation’s Neighborhood Grants are investments in nonprofit organizations—nominated by Starbucks partners—to help build sustained local impact and inspire increased partner volunteerism in our communities. Since 2019, more than 15,000 Starbucks partners have participated, resulting in Neighborhood Grants to more than 3,000 organizations across the U.S. and Canada totaling more than $5 million.

   

Youth Equity Grants

In 2021, the Foundation awarded more than $4 million to support national nonprofits that serve BIPOC youth. These grants help advance diversity, equity, and inclusion programs; youth, mentorship, and leadership development; and life skills training that addresses systemic barriers and promotes equitable outcomes for young people.

   

Disaster Response

The Foundation continues to support emergency preparedness and disaster response around the world. In fiscal 2021, the Foundation donated $4 million to uplift communities impacted by disaster. This included continued support for COVID-19 prevention, awareness, and emergency support to coffee- and tea-growing communities. In the U.S., the Foundation extended assistance to communities impacted by natural disasters, from winter storms to hurricanes and wildfires, and invited customers to join in giving through the Starbucks mobile app and point of sale donations. The Foundation also awarded grants to support resettlement of Afghan families.

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NAVIGATING THE COVID-19 PANDEMIC

Throughout the COVID-19 pandemic, Starbucks has remained committed to prioritizing the health and well-being of our partners and customers, playing a constructive role in supporting local health officials and government leaders as they work to combat the virus, and showing up in positive and responsible ways to serve our community.

     

Our Partners

Our partners have continued to show up for their communities in the face of extraordinary circumstances, and we are committed to keeping partner care front and center. In the early months of the pandemic and through fiscal 2021, we provided partner benefits that included service pay, catastrophe pay, benefits continuation, expanded mental health support, expanded backup childcare support, and food and beverage allowances—with no involuntary layoffs. When the Company implemented modified operations and reduced store hours in May 2020, Starbucks offered a COVID-19 leave of absence policy for U.S. partners who preferred to take unpaid leave through June 2021. This enabled partners to keep their existing benefits and explore eligibility for federal and state unemployment assistance. Throughout the pandemic, Starbucks continued to help partners impacted by adjusted hours of operation, modifications to operations, or a temporary closure by transferring partners to other stores and providing catastrophe pay in a scenario where partners are unable to work due to a precautionary store closure, which now covers a minimum of two instances when necessary.

     
 

Safe and Equitable Vaccine Access

Starbucks believes that businesses have a role and responsibility to support our communities with safe and equitable vaccine access. We remain committed to sharing educational information and resources about the COVID-19 vaccine and supporting our communities in equitable access to vaccinations.

     
  We continue to strongly encourage our partners to receive the COVID-19 vaccine. Starbucks provides up to two hours of paid time off for partners to receive each dose of the vaccine, up to three doses, as well as up to 4 hours of paid time off if partners experience vaccine-related side effects and miss a scheduled shift within 48 hours of receiving each dose of the COVID-19 vaccine or booster.
  Starbucks and other companies joined a first-of-its kind public-private partnership, the Washington State Vaccine Action Command and Coordination Systems (“VACCS”) Center, to help optimize accelerated, safe, and equitable access to the COVID-19 vaccines across the State of Washington.
  Business alliance Challenge Seattle in partnership with Washington state businesses, including Starbucks, released an open-sourced playbook of best practices from the VACCS partnership, so that other states and government leaders, nonprofits, and community organizations could leverage the findings and efficiencies for mass vaccination sites across the country.
  Starbucks and the Foundation together have contributed nearly $500,000 to innovative programs designed to increase safe and equitable vaccine access, and through programs and partnerships the Company has remained focused on providing ongoing information and education to address vaccine hesitancy in communities across the country.

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Planet

Starbucks is committed to being resource positive—giving back more than we take from the planet. Over the course of our 50 years, with the help of our partners, we have looked for ways to help protect our planet consistent with the belief that we can build a great business that scales for good—driving innovation, ensuring a sustainable future for coffee, and caring for people.

In fiscal 2021, we solidified our pathway to a planet positive future by setting a multi-decade commitment to reduce our carbon, water, and waste by half by 2030.

We can only achieve this ambition working together with our stakeholders—every partner, supplier, farmer, and customer is part of our journey to store more carbon than we emit, eliminate waste from our value chain, and replenish more freshwater than we use.

2030 Goals

In fiscal 2021, rooted in science, grounded in Starbucks Mission and Values, and informed by comprehensive market research and trials, Starbucks finalized 2030 environmental goals to cut our carbon, water, and waste footprints by half, working from a fiscal 2019 baseline.

  Carbon: 50% absolute reduction in scope 1, 2, and 3 greenhouse gas emissions representing all of Starbucks direct operations and value chain
     
  Water: 50% of water withdrawal across direct operations, stores, packaging, and agricultural supply chain will be conserved or replenished, prioritizing action in high-risk water basins while supporting watershed health, ecosystem resilience, and water equity
     
  Waste: 50% reduction in waste sent to landfill from stores (including packaging that leaves stores) and direct operations, driven by a broader shift toward a circular economy
     
  Our carbon goal has been validated as science-based from the Science Based Targets Initiative (“SBTi”). The SBTi has confirmed that the scope 1 and 2 portion of our 2030 carbon target is aligned with a 1.5°C pathway, the most ambitious level they validate. Our sustainability commitments are governed through our Global Environmental Council, which is comprised of senior leaders across Starbucks whose compensation is tied to performance against our goals. We also formally review and seek counsel from our Nominating/Governance Committee, along with external sustainability experts.
     
  Fiscal 2021 progress against our goals will be available in our fiscal 2021 Global Environmental and Social Impact Report.
     
  To meet our 2030 goals, we set five key strategies:
     
  Expand plant-based menu options
  Shift away from single-use to reusable packaging
  Invest in regenerative agriculture, reforestation, forest conservation, and water replenishment in our supply chain
  Invest in better ways to manage our waste
  Innovate to develop more sustainable stores, operations, manufacturing, and delivery
     

Plant-Based Menu Expansion

Expanding Starbucks plant-based menu globally is one of the ways we are pursuing our carbon reduction goal. Our aim is to provide customers with a variety of choices. Starbucks stores around the globe continued to launch new plant-based menu options in fiscal 2021. The addition of oatmilk to Starbucks U.S. menus is the latest progress in the Company’s ongoing commitment to be a resource positive company. Oatmilk is the fourth non-dairy milk alternative available for customers in the U.S. to enjoy, alongside soy milk, coconutmilk, and almondmilk. In China, Starbucks launched the first 100% plant-based Frappuccino® blended beverage and opened the Shanghai Greener Store, where more than half the menu is plant-based and oatmilk is the default option for most beverages.

     

Managing Waste – Cups and Packaging

Efforts to reduce single-use cup waste are not new to Starbucks. We have offered the option for customers to enjoy their beverage in For Here Ware or to BYOC (bring your own cup) for a discount since the 1980s. In fiscal 2021, after removing the option from our stores due to COVID-19, we proudly reintroduced personal reusable cups and For Here Ware in all markets.

     
  We continue to conduct consumer and market research to better understand how best to incentivize the use of reusables. In fiscal 2021, our test-and-learn approach included testing a Borrow-A-Cup program in stores in Seattle and Japan, which gave customers the option to receive their beverage in a reusable cup and return it at a participating store’s contactless kiosk. International markets also identified key pathways in support of our 2030 waste reduction target. Starbucks Europe, Middle East, and Africa (“EMEA”) committed to offering a reusable cup share program in all EMEA stores by 2025, and Starbucks South Korea committed to eliminating single-use cups by 2025, while introducing a reusable cup program in 16 stores as of the first quarter of fiscal 2021.
     
  We are also taking action to shift away from single-use plastics and champion the circular economy through our participation in the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment. As part of this initiative, we are taking action to make our plastic packaging reusable, recyclable, or compostable and increase the use of recycled content. We continue to further the development of compostable and recyclable hot cups and availability of hot cup recycling.

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Renewable Energy

Worldwide, Starbucks purchases enough renewable energy to power 100% of our company-operated stores and facilities in the U.S., Canada, and Europe, and, in fiscal 2020, 72% of company-operated locations globally, with market constraints in China and Japan challenging our ability to meet the goal of using renewable energy to power 100% of our operations globally.

   
  Expanding our roster of renewable energy projects in the U.S. is a priority for Starbucks. In fiscal 2021, we continued to use our scale to drive innovation across the energy sector and support not only our stores but also the communities in which we operate with renewable energy. In furtherance of our planet-positive goals, Starbucks has committed to investing nearly $97 million in up to 23 new community solar projects in the State of New York in partnership with Generate Capital, which will supply solar energy to more than 24,000 households, small businesses, nonprofits, churches, universities, and Starbucks stores. Six of these projects went into service in fiscal 2021. Starbucks also completed the installation of a one-megawatt solar array at the Starbucks Carson Valley Roasting Plant and Distribution Center. On-site solar energy will provide nearly a third of the Roasting Plant and Distribution Center’s electricity for the year.
   

Greener Stores Framework

Developed in 2018, our open-source Greener Store Framework, co-developed with the World Wildlife Fund, is designed to accelerate the transformation of retail towards lower-impact stores that achieve reductions in carbon emissions, water usage, and landfill waste. In fiscal 2020, Starbucks has verified more than 2,300 Greener Stores in the U.S. and Canada and, in fiscal 2021, announced we will begin using the framework outside of North America to achieve our goal of building and retrofitting 10,000 Greener Stores globally by 2025. Our first Greener Store outside of North America opened in Shanghai, China with a focus on circularity. The Shanghai Greener Store has been designed and built to reduce waste, repurpose goods, and serve as a platform for future innovation.

   

Greener Apron Partners

More than 38,000 Starbucks partners around the world have enrolled in the Greener Apron sustainability training program through Starbucks Global Academy, and we continue to expand opportunities for partners to engage on sustainability. Last summer, 200 partners from six countries completed former U.S. Vice President Al Gore’s Climate Reality Leadership Training program to learn more about how they can inspire climate action and advocacy in their communities.

   

Powerful Partnerships to Increase Impact

Starbucks believes we are better together, partnering with like-minded companies and coalitions in an effort to achieve a planet-positive future. In fiscal 2021, Starbucks joined the Dairy Net Zero Initiative, a partnership of the U.S. dairy community seeking to achieve net zero greenhouse gas emissions and improvements in water quality on farms. Starbucks has also joined the Farm Powered Strategic Alliance as a founding member, which uses food waste from our supply chains to produce low carbon fertilizer that dairy farmers can use to support their regenerative agriculture practices.

   
  Starbucks has also joined the UN Global Compact CEO Water Mandate, a CEO-led coalition, as well as the Water Resilience Coalition to help preserve freshwater resources globally. We continue our work with the Transform to Net Zero Coalition, to help accelerate a just transition to a net-zero carbon economy by 2050. We continue to work with Closed Loop Partners and the Next Gen Consortium to identify, accelerate, and scale commercially viable, circular foodservice packaging solutions.
   
 

ASU-Starbucks Center for People and the Planet

Building on our long-standing partnership, Starbucks and Arizona State University announced the creation of the ASU-Starbucks Center for the Future of People and the Planet—a new research and rapid innovation facility created to find new ways to design, build, and operate Starbucks stores. Scheduled to open in Spring 2022 on ASU’s Tempe campus and composed of a dedicated team of scientists, researchers, and support staff, including subject-matter experts from Starbucks and ASU, the center’s objective is to positively impact the future of our planet.

   
Coffee
   
Coffee is at our core. It is where we started and why we are here. Our team of experts are dedicated to sourcing, managing, roasting, blending, delivering, and brewing high-quality arabica coffee from diverse regions around the world, so we can continue to make exceptional, consistent beverages for our customers that are crafted to their individual preferences.
 
But our work goes far beyond making great coffee. We have taken steps to support the well-being of the many people who make coffee possible, from bean to cup, farmer to customer. We are committed to sourcing coffee responsibly, for the betterment of people and planet, while we also work to empower farmers, improve their livelihoods, and positively impact their communities.
   

Sourcing Coffee, Tea, and Cocoa Responsibly

The cornerstone of our ethical sourcing approach to buying coffee is Coffee and Farmer Equity (“C.A.F.E.”) Practices. C.A.F.E. Practices, developed in partnership with Conservation International, measures farms against economic, social, and environmental criteria. The C.A.F.E. Practices program is designed to promote transparent and sustainable coffee growing practices while also helping protect the well-being of coffee farmers and workers, their families, and their communities. Due to restrictions caused by COVID-19, auditing teams have been unable to complete all the necessary in-person, on-farm audits of our coffee production, resulting in the expiration of verifications for farms whose verification ended in fiscal 2020 and were not audited. As a result 98.6% of our coffee in fiscal 2020 being sourced from C.A.F.E. Practice-verified farms.

   

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  In fiscal 2020, Starbucks sourced 99.7% of tea from Rainforest Alliance Certified farms. For cocoa-based beverage ingredients, in fiscal 2020, 100% of cocoa beans were ethically sourced from either COCOA Practices-verified supply chains or UTZ certified farms. The UTZ program is now part of the Rainforest Alliance. We continue to strengthen our approach, programs, and partnerships for sustainably sourcing tea and cocoa.
   
  Fiscal 2021 measurement and progress for coffee, tea, and cocoa will be available in our fiscal 2021 Global Environmental and Social Impact Report.
   

Sustainable Future of Coffee

Coffee farmers rely on a healthy planet to produce high-quality coffee. In fiscal 2021, Starbucks announced a new goal to achieve carbon neutral green coffee and conserve water usage in green coffee processing by 50% by 2030. This commitment builds on Starbucks work to source coffee responsibly, for the betterment of people and planet, while we also work to empower farmers, improve their livelihoods, and positively impact their communities, all with the aspiration of ensuring a sustainable future of coffee.

   
  In this effort, we are working to help decrease greenhouse gas emissions by equipping farmers with precision agronomy tools and conserving water through direct investments in wet mills. As of the end of the first quarter of fiscal 2022, Starbucks funded the replacement of more than 1,200 wet mills with more efficient versions in six countries, saving up to 80% of water in coffee processing where the new equipment was installed. We also collected more than 22,500 soil samples on coffee farms that will be used to inform custom fertilization plans with the goal of helping reduce on-farm carbon emissions.
   

Climate-resistant Coffee Trees

Starbucks has a goal to provide 100 million coffee trees to farmers by 2025. In fiscal 2021, we distributed more than 10 million trees to farmers in Mexico, Guatemala, and El Salvador. Over the past six years as part of our 10-year, 100 million-tree commitment, Starbucks has donated nearly 60 million coffee trees to farmers. These new trees are bred to be resistant to coffee rust, a disease associated with climate change, and to help farmers improve the quality and yields of their harvest. In fiscal 2021, we announced a partnership with the Federacion Nacional de Cafeteros de Colombia to distribute 23 million coffee seedlings to more than 12,000 C.A.F.E. Practices farmers over the next two and a half years with the goal of helping farmers renovate their farms and improving productivity and yields. In the last year, we have distributed more than 7 million coffee trees as part of this program. In addition, we have also expanded the program with a goal to distribute more than 45 million coffee trees to C.A.F.E. Practice-verified farmers in Colombia by 2023.

   

Global Farmer Support

Starbucks operates ten Farmer Support Centers worldwide, where agronomists and quality experts work alongside coffee farmers—whether they sell to Starbucks or not—to share tools and information to help increase the productivity, quality, and profitability of coffee on their farms and improve their livelihoods. In fiscal 2021, Starbucks committed an additional $50 million to the Global Farmer Fund, bringing our total investment to $100 million.

   

Starbucks Digital Traceability

Starbucks continues to offer the Starbucks Digital Traceability tool at https://traceability.starbucks.com, a way for customers to engage directly with their coffee and learn more about its journey from bean to cup using a convenient mobile web app.

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Proxy Statement

We are making this proxy statement available to you on January 28, 2022, in connection with the solicitation of proxies by our board of directors for the Starbucks Corporation 2022 Annual Meeting of Shareholders. At Starbucks and in this proxy statement, we refer to our employees as “partners.” Also in this proxy statement, we sometimes refer to Starbucks as the “Company,” “we,” or “us,” and to the 2022 Annual Meeting of Shareholders as the “Annual Meeting.” When we refer to the Company’s fiscal year, we mean the annual period ending on the Sunday closest to September 30 of the stated year. Information in this proxy statement for 2021 generally refers to our 2021 fiscal year, which was from September 28, 2020, through October 3, 2021 (“fiscal 2021”).

VOTING INFORMATION

Record Date. The record date for the Annual Meeting is January 6, 2022. On the record date, there were 1,154,519,627 shares of our common stock outstanding and there were no outstanding shares of any other class of stock.

Voting Your Proxy. Holders of shares of common stock are entitled to cast one vote per share on all matters. Proxies will be voted as instructed by the shareholder or shareholders granting the proxy. Unless contrary instructions are specified, if the proxy is completed and submitted (and not revoked) prior to the Annual Meeting, the shares of our common stock represented by the proxy will be voted as shown in the table below and in accordance with the best judgment of the named proxies on any other matters properly brought before the Annual Meeting.

Proposal No.       Vote       Board
Recommendation
      Broker Non-vote       Vote Required
for Approval
      Advisory
Proposal?
      Effect of
Abstentions
and Broker
Non-votes
1   Election of each of the 11 director nominees.   FOR   This matter is non-routine, thus if you hold your shares in street name, your broker may not vote your shares for you.   Majority of votes cast   No   No effect
2   Approval of the amendment and restatement of the 2005 Long- Term Equity Incentive Plan.   FOR   This matter is non-routine, thus if you hold your shares in street name, your broker may not vote your shares for you.   Majority of votes cast   No   No effect
3   Approval, on a nonbinding, advisory basis, of the compensation paid to our named executive officers.   FOR   This matter is non-routine, thus if you hold your shares in street name, your broker may not vote your shares for you.   Majority of votes cast   Yes   No effect
4   Ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending October 2, 2022.   FOR   This matter is routine, thus if you hold your shares in street name, your broker may vote your shares for you absent any other instructions from you.   Majority of votes cast   Yes   Abstention has no effect and broker has discretion to vote
5   Shareholder proposal regarding annual reports regarding the prevention of harassment and discrimination in the workplace.   AGAINST   This matter is non-routine, thus if you hold your shares in street name, your broker may not vote your shares for you.   Majority of votes cast   Yes   No effect

Revoking Your Proxy. If you are a registered shareholder (meaning a shareholder who holds shares issued in their name and therefore appears on the Company’s share register) and have executed a proxy, you may revoke or change your proxy at any time before it is exercised by: (i) executing and delivering a later-dated proxy card to our corporate secretary prior to the Annual Meeting; (ii) delivering written notice of revocation of the proxy to our corporate secretary prior to the Annual Meeting; or (iii) attending and voting at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. If you voted by telephone or the Internet and wish to change your vote, you may call the toll-free number or go to the website provided on the next page, as may be applicable in the case of your earlier vote, and follow the directions for revoking or changing your vote. If your shares are held in the name of a broker, bank, or other holder of record, you should follow the voting instructions you receive from the holder of record to revoke your proxy or change your vote.

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PROXY STATEMENT

Vote Required. The presence, in person or by proxy, of holders of a majority of the outstanding shares of our common stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and “broker non-votes” (shares held by a broker or nominee that does not have discretionary authority to vote on a particular matter and has not received voting instructions from its client on that matter but are deemed to be present at the Annual Meeting) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting.

We have majority voting procedures for the election of directors in uncontested elections. If a quorum is present, a nominee for election to a position on the board of directors will be elected as a director if the votes cast for the nominee exceed the votes cast against the nominee. The term of any incumbent director who does not receive a majority of votes cast in an election held under the majority voting standard terminates on the earliest to occur of: (i) 90 days from the date on which the voting results of the election are certified; (ii) the date the board of directors fills the position; or (iii) the date the director resigns. If a quorum is present, approval of the amendment and restatement of our 2005 Long-Term Equity Incentive Plan, the nonbinding, advisory vote on the compensation paid to our named executive officers, the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm, and the approval of any shareholder proposal, and any other matters that properly come before the meeting, require that the votes cast in favor of such actions exceed the votes cast against such actions.

Unless you provide voting instructions to any broker holding shares on your behalf, your broker may not use discretionary authority to vote your shares on any of the matters to be considered at the Annual Meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your vote can be counted. Proxies and ballots will be received and tabulated by a representative of Broadridge Financial Solutions, Inc., our inspector of elections for the Annual Meeting.

Please cast your vote as soon as possible. Make sure to have your proxy card or VIF in hand:

       
       
By internet
go to www.proxyvote.com;
By toll-free telephone
from the United States, U.S. territories, and Canada: call 1-800-690-6903;
By mail (if you received a paper copy of the proxy materials by mail): mark, sign, date, and promptly mail the enclosed proxy card in the postage-paid envelope; or By scanning the QR code using your mobile device.
       

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PROPOSAL 1

ELECTION OF DIRECTORS

Our board of directors currently has 11 members. The board of directors has nominated all 11 directors for election at the Annual Meeting, to serve until the 2023 Annual Meeting of Shareholders or until their respective successors have been elected and qualified. All of the 11 directors were elected at the 2021 Annual Meeting.

Unless otherwise directed, the persons named in the proxy as proxyholders intend to vote all proxies FOR the election of the nominees, as listed below, each of whom has consented to serve as a director if elected. If, at the time of the Annual Meeting, any nominee is unable or declines to serve as a director, the discretionary authority provided in the enclosed proxy will be exercised to vote for a substitute candidate designated by the board of directors, unless the board chooses to reduce its own size. The board of directors has no reason to believe that any of the nominees will be unable or will decline to serve if elected. Proxies cannot be voted for more than 11 persons since that is the total number of nominees.

STARBUCKS BOARD OF DIRECTORS

We believe that our directors should satisfy a number of qualifications, including demonstrated integrity, a record of personal accomplishments, a commitment to participation in board activities, and other attributes discussed below in Our Director Nominations Process section on page 39. We also endeavor to have a board that represents a range of qualifications, skills, and depth of experience in areas that are relevant to and contribute to the board’s oversight of the Company’s global activities. Following the biographical information for each director nominee, we describe the key experiences, qualifications, skills, and attributes the director nominee brings to the board that, for reasons discussed in the chart below, are important to Starbucks businesses and structure. The board considered these key experiences, qualifications, skills, attributes, and the nominees’ other qualifications in determining to recommend that they be nominated for election.

Experience/Qualifications/Skills/Attributes

      Industry Experience       As the premier roaster, marketer, and retailer of specialty coffee in the world, we seek directors who have knowledge of and experience in the consumer products, retail, food, and beverage industries, which is useful in understanding our product development, retail, and licensing operations.
  Financial/Capital Allocation Experience   As a large public company, Starbucks is committed to strong financial discipline, effective allocation of capital, an appropriate capital structure, risk management, legal, and regulatory compliance, and accurate disclosure practices. We believe that directors who have senior financial leadership experience at large global organizations and financial institutions, and directors who are experienced allocators of capital are instrumental to Starbucks success.
  Gender, Ethnic, or National Diversity   We value representation of gender, ethnic, geographic, cultural, and other perspectives that expand the board’s understanding of the needs and viewpoints of our customers, partners, governments, and other stakeholders worldwide.
  Brand Marketing Experience   We seek directors with brand marketing experience because of the importance of image and reputation in the specialty coffee business, and our objective to maintain Starbucks standing as one of the most recognized and respected brands in the world.
  International Operations & Distribution Experience   Starbucks has a strong global presence. The Company has a presence in over 33,800 stores in 84 markets around the globe. Accordingly, we value international operations and distribution experience, especially as we continue to expand globally and develop new channels of distribution.
  Governmental & Public Policy Experience   We seek directors with domestic and international experience in corporate responsibility, sustainability, and public policy to help us address significant public policy issues, adapt to different business and regulatory environments, and facilitate our work with various governmental entities and non-governmental organizations all over the world. This experience is particularly relevant during times of increased volatility in global politics and economics.
  Technology Experience   Our business has become increasingly complex as we have enhanced our offerings, expanded our global footprint, and increased online customer ordering capabilities. This increased complexity requires a sophisticated level of technology resources and infrastructure as well as technological expertise. And, as a consumer retail company, we seek directors who have digital and social media experience, which can provide insight and perspective with respect to our various business functions.
  Human Capital Management Experience   At Starbucks, our people are one of our most valuable assets. We seek to live our values through the culture we develop with our partners and our customers. We value directors with experience managing and developing values and culture in a large global workforce so that we can continue to live our mission to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.
  Corporate Social Responsibility Experience   We believe that directors who have experience in advocating for gender and racial equality, human rights, and effective corporate citizenship ensure that the Company remains at the forefront of advancing social justice, diversity, and inclusivity.
  Environmental/Climate Change Experience   We value directors with experience in environmental and climate change topics strengthens the board’s oversight and assures that strategic business imperatives and long-term value creation for shareholders are achieved within a responsible and sustainable business model.
  Public Company Board Experience   Directors who have served on other public company boards can offer advice and perspective with respect to board dynamics and operations, relations between the board and Starbucks management, and other matters, including corporate governance, executive compensation, risk management and oversight of strategic, operational, compliance-related matters, and relations with shareholders.
  Senior Leadership Experience   We believe that it is important for our directors to have served in senior leadership roles at other organizations, which demonstrates strong abilities to motivate and manage others, to identify and develop leadership qualities in others, and to manage organizations. Starbucks global scale and complexity requires aligning multiple areas of operations, including marketing, merchandising, supply chain, human resources, real estate, and technology. Directors with senior leadership experience are uniquely positioned to contribute practical insight into business strategy and operations, and support the achievement of strategic priorities and objectives.

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Board Diversity Matrix as of January 6, 2022

Board Size:
Total Number of Directors   11
Gender:   Male   Female   Non-Binary   Gender Undisclosed
Number of directors based on gender identity   7   4   0   0
Number of directors who identify in any of the categories below:                
African American or Black   0   1   0   0
Alaskan Native or American Indian   0   0   0   0
Asian   1   2   0   0
Hispanic or Latinx   1   0   0   0
Native Hawaiian or Pacific Islander   0   0   0   0
White   5   1   0   0
Two or More Races or Ethnicities   0   0   0   0
LGBTQ+(1)   0
Undisclosed   0
   
(1) None of our directors self-identified as lesbian, gay, bisexual, transgender, or a member of the queer community.

The table below summarizes the key experience, qualifications, and attributes for each director nominee and highlights the balanced mix of experience, qualifications, and attributes of the board as a whole. This high-level summary is not intended to be an exhaustive list of each director nominee’s skills or contributions to the board. No individual experience, qualification, or attribute is solely dispositive of becoming a member of our board.

 
                         
  Industry
Experience
Financial/
Capital
Allocation
Experience
Gender,
Ethnic,
or
National
Diversity
Brand
Marketing
Experience
International
Operations &
Distribution
Experience
Governmental
& Public
Policy
Experience
Technology
Experience
Human
Capital
Management  
Experience
Corporate
Social
Responsibility
Experience
Environmental/
Climate
Change
Experience
Public
Company
Board
Experience
Senior
Leadership
Experience
Richard E. Allison, Jr.            
Andrew Campion          
Mary N. Dillon            
Isabel Ge Mahe          
Mellody Hobson          
Kevin R. Johnson        
Jørgen Vig Knudstorp          
Satya Nadella          
Joshua Cooper Ramo            
Clara Shih            
Javier G. Teruel            

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PROPOSAL 1 – ELECTION OF DIRECTORS

Board Recommendation

The board of directors recommends that shareholders vote FOR the election of each of the nominees to the board of directors described below.

Nominees

Set forth below is certain information furnished to us by the director nominees. There are no family relationships among any of our current directors or executive officers. None of the corporations or other organizations referenced in the biographical information below is a parent, subsidiary, or other affiliate of Starbucks.

                                 
RICHARD E. ALLISON, JR.   Independent
Age: 54   Committees:
Director Since: 2019 CMDC, NCGC
Flat White           
         

RICHARD E. ALLISON, JR. has been a Starbucks director since September 2019. He has served as Chief Executive Officer and a member of the board of directors of Domino’s Pizza, Inc., the largest pizza company in the world based on global retail sales, since July 2018. He joined Domino’s in March 2011 as Executive Vice President of International and then served as President, Domino’s International from October 2014 to July 2018. During the seven years that Mr. Allison led the international division, it expanded by more than 20 countries and grew by more than 5,000 stores. Prior to joining Domino’s, Mr. Allison worked at Bain & Company, Inc. for more than 13 years, serving as a Partner from 2004 to 2010, and as co-leader of Bain’s restaurant practice.

DIRECTOR QUALIFICATIONS

Throughout Mr. Allison’s extensive experience in the restaurant industry, particularly his years spent at Domino’s, he has cultivated a deep understanding of the large- and small-scale operations, strategic planning initiatives, market development objectives, packaging and recycling initiatives, and other critical elements of steering a global restaurant chain. The growth of Domino’s global brand under Mr. Allison’s direction highlights his strong leadership capabilities and dedication to excellence, qualities that he brings to his role as director.

 

                        
ANDREW CAMPION   Independent    
Age: 50   Committees:
Director Since: 2019 ACC, CMDC
Brown Sugar Oatmilk Latte
         

ANDREW CAMPION has been a Starbucks director since September 2019. He has served as the Chief Operating Officer of NIKE, Inc., a multinational athletic footwear, apparel, equipment, and services corporation, since March 2020. Previously, Mr. Campion served as Executive Vice President and Chief Financial Officer of NIKE, Inc. from 2015 to 2020. From 2014 to 2015, he served as Senior Vice President, Strategy, Finance, and Investor Relations for NIKE, Inc., which he assumed in addition to his prior role as Chief Financial Officer of the NIKE Brand, to which he was appointed in 2010. Mr. Campion joined NIKE, Inc. in 2007, leading Global Strategic Planning, Global Financial Planning, and Market Intelligence. From 1996 to 2007, he held leadership roles in strategic planning, mergers and acquisitions, financial planning and analysis, operations planning, investor relations, and tax at The Walt Disney Company, a multinational mass media and entertainment corporation. Mr. Campion also currently serves on the

Board of Directors of The Springhill Company, the Board of Directors of the Los Angeles 2028 Olympic and Paralympic Games, and the Board of Advisors of the UCLA Anderson Graduate School of Management.

DIRECTOR QUALIFICATIONS

As a chief operating officer of a large multinational company, Mr. Campion has a broad range of leadership experience in the public company sector, including overseeing global brand and business growth strategies, operational excellence, environmental sustainability efforts, talent and team development, and enterprise financial management. His background in finance and law enables him to provide unique macro- and micro-level insights into business decisions and their potential impact on the Company’s strategic objectives. Mr. Campion brings his deep knowledge of investor relations, among his other skills and passions, to his role as director.

 

                        
MARY N. DILLON   Independent    
  Age: 60   Committees:
Director Since: 2016   CMDC (chair), NCGC
Oatmilk Latte  
         

MARY N. DILLON has been a Starbucks director since January 2016. Since June 2021, Ms. Dillon has served as Executive Chair of the Board of Directors of Ulta Beauty, Inc., the nation’s largest beauty retailer. From July 2013 to June 2021, she served as Chief Executive Officer and a member of the Board of Directors of Ulta Beauty, Inc. Prior to joining Ulta Beauty, Inc., she served as President and Chief Executive Officer and a member of the Board of Directors of United States Cellular Corporation, a provider of wireless telecommunications services, from 2010 to 2013. Prior to joining U.S. Cellular, Ms. Dillon served as Global Chief Marketing Officer and Executive Vice President of McDonald’s Corporation from 2005 to 2010, where she led the company’s worldwide marketing efforts and global brand strategy. Prior to joining McDonald’s, Ms. Dillon held several positions of increasing responsibility at PepsiCo Corporation, including as President of the Quaker Foods division from 2004 to 2005 and as Vice President of Marketing for Gatorade and Quaker Foods from 2002 to 2004. Ms. Dillon also currently serves on the Board of Directors of KKR & Co. Inc., a global investment company, and previously served on the Board of Directors of Target Corporation.

DIRECTOR QUALIFICATIONS

Having served as a chief executive officer of a large publicly traded company and with her executive leadership experience, Ms. Dillon provides the board with top-level leadership perspective in organizational management and operations as well as capital allocation. With over thirty years of experience with large consumer-driven businesses, Ms. Dillon brings to the board her unique insights into the management of complex organizations and the development, engagement, and championship of diversity and inclusion for


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employees in today’s evolving retail environment. She also possesses valuable knowledge and expertise in brand marketing and strategy.

 

         
ISABEL GE MAHE   Independent    
Age: 47   Committees:
Director Since: 2019   ACC, NCGC
Espresso    
         

ISABEL GE MAHE has been a Starbucks director since September 2019. She has served as the Vice President and Managing Director of Greater China of Apple Inc., a multinational technology company, since 2017. In addition to providing leadership and coordination of Apple’s Greater China-based teams, she is a key influencer for China-inspired product features. From 2008 through 2017, Ms. Ge Mahe served as Apple’s Vice President of Wireless Technologies. Before joining Apple, she served as Vice President of Wireless Software Engineering at Palm, Inc., a computer software and hardware company, and held key technical and managerial positions at other wireless companies.

DIRECTOR QUALIFICATIONS

Ms. Ge Mahe brings her unique background in the technology sector and Asian markets to her role as director. As Starbucks continues to grow in Asian markets and expands its technology-based strategies for information aggregation and consumer engagement, Ms. Ge Mahe’s knowledge will be invaluable. Her experience at Apple, Inc. and Palm, Inc. exemplify both technical expertise and managerial skills, including guiding individual employees and broader regional divisions to meet consumer needs and reach company-wide metrics for success. For five years in a row since 2017, Ms. Ge Mahe has been listed as one of Fortune Magazine’s “Most Powerful Women International.”

 

         
MELLODY HOBSON   Independent, chair of the board    
Age: 52    
Director Since: 2005    
Pike Place® Roast, black*
         

MELLODY HOBSON has served as chair of the board since March 17, 2021. She served as vice chair of the board from June 2018 to March 2021 and has been a Starbucks director since February 2005. Ms. Hobson has served as Co-CEO, President, and Director of Ariel Investments, LLC, an investment management firm, since 2019. She previously served as President of Ariel Investments, LLC from 2000 to 2019. In addition, she serves as the President and Chairman of the Board of Trustees of the Ariel Investment Trust, a registered investment company advised by Ariel Investments. She previously served as Senior Vice President and Director of Marketing at Ariel Capital Management, Inc. from 1994 to 2000, and as Vice President of Marketing at Ariel Capital Management, Inc. from 1991 to 1994. Ms. Hobson works with a variety of civic and professional institutions, including serving as Co-Chair of the Lucas Museum of Narrative Arts and as Chairman of After School Matters, which provides Chicago teens with high quality out-of-school time programs. Additionally, she is on the Board of Governors’ Executive Committee of the Investment Company Institute. Ms. Hobson also serves on the Board of Directors of JPMorgan Chase & Co., and, she previously served on the Board of Directors of DreamWorks Animation SKG, Inc. and The Estée Lauder Companies Inc.

DIRECTOR QUALIFICATIONS

As the president, Co-CEO, and a director of a large investment company, Ms. Hobson brings significant leadership, operational, investment, and financial expertise to the board of directors. She brings a strong investor perspective to the boardroom and infuses discussions with insights from a shareholder, capital markets, and capital allocation lens. Ms. Hobson’s prior experience as an on-air CBS news contributor and analyst on finance and the economy provides insight into media, communications, and public relations considerations. Ms. Hobson also brings to the board of directors valuable knowledge of corporate governance and similar issues from her service on other publicly traded companies’ boards of directors as well as her service on the Investment Company Institute’s Board of Governors’ Executive Committee and her prior service on the Securities and Exchange Commission (“SEC”) Investment Advisory Committee. In addition, Ms. Hobson has brand marketing experience through her past service on the Board of Directors of The Estée Lauder Companies Inc. and DreamWorks Animation SKG prior to its acquisition by Comcast Corporation.

 

* Pike Place is a registered trademark of The Pike Place Market PDA, used under license.

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KEVIN R. JOHNSON
president and chief executive officer
   
Age: 61    
Director Since: 2009    
Triple Espresso Macchiato    
         

KEVIN R. JOHNSON has served as president and chief executive officer of Starbucks since April 2017 and has been a Starbucks director since March 2009. Mr. Johnson served as president and chief operating officer of Starbucks from March 2015 to April 2017. Mr. Johnson served as Chief Executive Officer of Juniper Networks, Inc., a leading provider of high-performance networking products and services, from September 2008 to December 2013. He also served on the Board of Directors of Juniper Networks from September 2008 to February 2014. Prior to joining Juniper Networks, Inc., Mr. Johnson served as President, Platforms and Services Division for Microsoft Corporation, a worldwide provider of software, services, and solutions. Mr. Johnson was a member of Microsoft’s Senior Leadership Team and held several senior executive positions over the course of his 16 years at Microsoft. Prior to joining Microsoft in 1992, Mr. Johnson worked in International Business Machine Corporation’s systems integration and consulting business.

DIRECTOR QUALIFICATIONS

Through his experience as a board member, former chief operating officer, and current president and chief executive officer of the Company, Mr. Johnson provides the board of directors with a unique perspective on Starbucks business, operations, strategic direction, vision, and the importance of identifying and developing talent and aligning partners to the Company’s Mission and Values. Mr. Johnson’s extensive experience in the technology industry provides the board of directors with unique insights into platforms for global integration of information systems as well as the use of technology in our brand marketing, media, and communications efforts. Through his various senior leadership positions, including his experience as Chief Executive Officer of Juniper Networks, Inc. and extensive senior executive experience with a large, multinational company, Mr. Johnson also has experience with the challenges inherent in managing a complex organization; leading global businesses that are planet-, people-, and profit-positive focused on both consumer and business needs; and utilizing technology to drive business strategy, productivity, and innovation.

 

         
JØRGEN VIG KNUDSTORP   Independent    
Age: 53   Committees:
Director Since: 2017   ACC, NCGC (chair)
Caramel Macchiato    
         

JØRGEN VIG KNUDSTORP has been a Starbucks director since March 2017. Since January 2017, Mr. Knudstorp has served as Executive Chairman of LEGO Brand Group, owner of the LEGO brand and part of the controlling company of the LEGO Group, a leading manufacturer of construction toys. From October 2004 to December 2016, he served as President and Chief Executive Officer of the LEGO Group. He previously held various leadership positions at the LEGO Group from 2001 to 2004, including Senior Vice President, Corporate Affairs from 2003 to 2004; Vice President, Strategic Development in 2003; Senior Director, Global Strategic Development & Alliance Management from 2002 to 2003; and Director, Strategic Development from 2001 to 2002. Prior to joining the LEGO Group, Mr. Knudstorp served as a Management Consultant at McKinsey & Company, a management consulting firm, from 1998 to 2001.

DIRECTOR QUALIFICATIONS

Mr. Knudstorp brings to the board his top executive leadership experiences at one of the world’s most renowned toy manufacturers, which has a highly recognizable brand and a record of innovation. His extensive global leadership experience provides the board with unique insights and knowledge of brand and digital marketing, strategy, consumer products, development and nurturing of human capital and organizational culture and values, environmental impact, finance, capital allocation, international operations and distribution, and formation and management of strategic alliances. The LEGO Brand is ranked as the world’s best reputed by RepTrak, and Mr. Knudstorp brings experience in building an authentic brand across ESG considerations in addition to product and employee experiences.

 

         
SATYA NADELLA   Independent    
Age: 54   Committees:
Director Since: 2017   NCGC
Double Espresso Shot    
         

SATYA NADELLA has been a Starbucks director since March 2017. Mr. Nadella has served as Chief Executive Officer and a member of the Board of Directors of Microsoft Corporation, a global technology provider, since February 2014. He has held various leadership positions at Microsoft Corporation since joining in 1992, and most recently, Mr. Nadella was executive vice president of Microsoft Corporation’s Cloud and Enterprise group. In this role, he led the transformation to the cloud infrastructure and services business. Previously, Nadella led research and development for the Online Services Division and was vice president of the Microsoft Business Division. Before joining Microsoft Corporation, Nadella was a member of the technology staff at Sun Microsystems. Mr. Nadella currently serves on the Board of Trustees of Fred Hutchinson Cancer Research Center and the University of Chicago Board of Trustees.

DIRECTOR QUALIFICATIONS

Mr. Nadella brings to the board of directors global business leadership experience, extensive experience in the technology industry, and an understanding of how technology will be used and experienced around the world, in addition to deep expertise in allocating capital and optimizing productivity. He also provides the board with invaluable insights as Starbucks continues its focus on innovative ways to use technology to elevate its brand and grow its business. His experience in leading a multinational, complex enterprise, aligning teams, motivating employees, addressing corporate and environmental responsibility, developing human capital and talent, fostering a robust culture, and his strategic and operational expertise have facilitated important contributions to board discussions and oversight. Mr. Nadella also brings insight and knowledge in international operations and distribution gained from his service as Chief Executive Officer and other senior leadership positions at one of the world’s largest public technology companies.

 


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JOSHUA COOPER RAMO   Independent  
Age: 53 Committees:
Director Since: 2011 ACC, NCGC
Double Espresso Macchiato    
         

JOSHUA COOPER RAMO has been a Starbucks director since May 2011. Since June 2020, Mr. Ramo has served as Chairman and Chief Executive Officer of Sornay, a privately-held advisory and principal investment firm. Until January 2020, Mr. Ramo was Co-Chief Executive Officer and Vice Chairman of Kissinger Associates, Inc., an advisory firm where he was employed since 2005. He was previously the Managing Partner of JL Thornton & Co., LLC, a corporate advisory specialist and an advisor to Goldman Sachs, from 2003 to 2005. Mr. Ramo has served as lead China advisor on more than $200 billion of transactions. Mr. Ramo spent his early career as a journalist, most recently with Time Magazine, from 1995 to 2002 serving as Senior Editor and Foreign Editor. He is a leading China scholar and has written several papers on China’s development that have been distributed in China and abroad. In 2008, Mr. Ramo served as China Analyst for NBC during the Summer Olympics in Beijing and in 2018, served the same role for NBC during the Winter Olympics in Pyeongchang. He is the author of two New York Times best-selling books, “The Age of the Unthinkable” (2009) and “The Seventh Sense” (2016). Mr. Ramo has been a term member of the Council on Foreign Relations, Asia 21 Leaders Program, World Economic Forum’s Young Global Leaders and Global Leaders for Tomorrow, and co-founder of the U.S.-China Young Leaders Forum. He also serves on the Board of Directors of FedEx Corporation.

DIRECTOR QUALIFICATIONS

Mr. Ramo’s broad international experience provides the board of directors unique insights related to Starbucks strategy, operations, and business as a global company. Mr. Ramo brings to the board significant strategic partnership, commercial transaction, business negotiation, and advisory experience as well as domestic and international public policy and responsible business experience. Mr. Ramo has extensive knowledge in several important strategic areas, including innovative problem-solving related to global risks and opportunities, particularly regarding China, global economics, and navigating cross-cultural and cross-border opportunities.

 

         
CLARA SHIH   Independent    
Age: 40   Committees:
Director Since: 2011   CMDC
Iced Sugar Cookie Almondmilk Latte    
         

CLARA SHIH has been a Starbucks director since December 2011. Since January 2021, Ms. Shih has served as Chief Executive Officer & General Manager of Service Cloud at Salesforce.com, Inc., a multinational software corporation. Since September 2020, Ms. Shih has served as Executive Chair and a Board member of Hearsay Systems, Inc., an enterprise software company serving Fortune 500 firms, which she co-founded in August 2009. Previously, she served as Chief Executive Officer of Hearsay Systems, Inc. From June 2006 to June 2009, she served as Product Management Director, AppExchange of Salesforce.com, Inc. From 2004 to 2006, she served as Associate, Strategy and Business Operations for Google, Inc. Previously, Ms. Shih was a software engineer at Microsoft Corporation. Ms. Shih, the creator of the first business application on Facebook, is the author of “The Facebook Era” (2009) and “The Social Business Imperative” (2016). She has been named one of Businessweek’s Top Young Entrepreneurs, one of Fortune’s Most Powerful Women

Entrepreneurs, and one of CNN Money’s “40 under 40: Ones to Watch.” She was also named a “Young Global Leader” by the World Economic Forum (Class of 2013).

DIRECTOR QUALIFICATIONS

Ms. Shih brings to the board general management, technology transformation, employee development, and entrepreneurial experience from her role as Chief Executive Officer of Service Cloud at Salesforce.com, Inc. and prior experience as founder and Chief Executive Officer of Hearsay Systems. She provides unique insights to Starbucks related to technology innovation and growth of the business, including digital and mobile strategy, technology ecosystem, and talent retention and hiring. She also provides valuable generational perspectives and insights into evolving consumer trends.

 

         
JAVIER G. TERUEL  Independent    
Age: 71   Committees:
Director Since: 2005   ACC (Chair), CMDC
Flat White    
         

JAVIER G. TERUEL has been a Starbucks director since September 2005. Mr. Teruel served as Vice Chairman of Colgate-Palmolive Company, a consumer products company, from July 2004 to April 2007, when he retired. Prior to being appointed Vice Chairman, Mr. Teruel served as Colgate-Palmolive Company’s Executive Vice President responsible for Asia, Central Europe, Africa, and Hill’s Pet Nutrition. After joining Colgate-Palmolive Company in Mexico in 1971, Mr. Teruel served as Vice President of Body Care in Global Business Development in New York and President and General Manager of Colgate-Mexico. He also served as President of Colgate-Europe, and as Chief Growth Officer responsible for the company’s growth functions. Mr. Teruel currently serves as a Partner of Spectron Desarrollo, SC, an impact investment and consulting firm, and as Chairman of Alta Growth Capital, a private equity firm. He previously served on the Board of Directors of The Pepsi Bottling Group, Inc., J.C. Penney Company, Inc., and Nielsen Holdings plc.

DIRECTOR QUALIFICATIONS

Mr. Teruel brings to the board extensive brand marketing experience and international distribution and operations experience from his various executive roles at a large, multinational consumer products company, including considerable product development, merchandising, and marketing skills and perspectives. His international background provides unique insights relevant to Starbucks strategy, operations, and business as a global company. He also provides important investment-oriented perspectives and insights into achieving growth in key business areas. Through his senior leadership and public company board experiences, Mr. Teruel also possesses extensive knowledge in several important business areas, including leadership, finance, risk assessment, and international, cross-border, and cross-cultural dynamics faced by global companies.

 


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Corporate Governance

BOARD STRUCTURE AND RESPONSIBILITIES

BOARD OF DIRECTORS

Audit and Compliance Committee

(“Audit Committee”)

Oversees the accounting and financial reporting processes and the internal and external audit processes, and reviews the financial information that will be provided to shareholders, the systems of internal control, risk management practices, and compliance with the Company’s standards of business conduct and code of ethics.

Compensation and Management Development Committee

(“Compensation Committee”)

Oversees compensation practices and determines compensation and other benefits for officers. Also oversees the development and implementation of human capital development plans and succession planning practices to foster sufficient management depth at the Company to support its continued growth and the talent needed to execute long-term strategies.

Nominating and Corporate Governance Committee

(“Nominating/Governance Committee”)

Oversees corporate governance, advises and makes recommendations to the board regarding candidates for election as directors of the Company, reviews and makes recommendations regarding the Company’s non-employee director compensation policy, oversees ESG policies and practices, and addresses any related matters.

Board Leadership

The board of directors is responsible for overseeing the exercise of corporate power and ensuring that Starbucks business and affairs are managed to meet the Company’s stated goals and objectives and that the long-term interests of the shareholders and stakeholders are served. The Governance Principles for the Board of Directors (“Governance Principles”) provide for the Nominating/Governance Committee to recommend to the board on a biennial basis a director for election by the board as the chair of the board. The board believes that it should maintain flexibility to select Starbucks chair of the board and board leadership structures. It believes that a two-year term for the chair provides continuity for the board.

Our president and ceo is the principal executive officer of the Company and has general charge and supervision of the business and strategic direction of the Company. Our independent chair of the board facilitates the board’s oversight of management and the Company’s long-range strategy and business initiatives and serves as a liaison between management and independent directors.

The duties of the chair of the board include the following:

Preside over and manage the meetings of the board;
Support a strong board culture by fostering an environment of open dialogue, effective information flow and constructive feedback among the members of the board and senior management, facilitating communication among the chair, the board as a whole, board committees, and senior management, and encouraging director participation in discussions;
Approve the scheduling of meetings of the board, lead the preparation of the agenda for each meeting, and approve the agenda and materials for each meeting;
Serve as liaison between management and independent directors;
Represent the board at annual meetings of shareholders and be available, when appropriate, for consultations with shareholders;
Act as an advisor to the president and ceo on strategic aspects of the business; and
Such other duties as prescribed by the board.

Independent Chair of the Board

Ms. Hobson has served as the chair of the board since March 17, 2021. Her term will expire at the 2023 Annual Meeting of Shareholders. Ms. Hobson is an independent, non-employee board member.

Our board believes that its leadership structure is appropriate because it effectively allocates authority, responsibility, and oversight between management and the independent members of our board and supports the independence of our non-management directors.

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Board Meeting Annual Calendar

Fiscal Year in Review Management and Financial Update Strategic Plan and Brand Social Impact Agenda Management and Financial Update Talent and Succession Planning (Inclusion and Diversity Update) Management and Financial Update Annual Financial Plan Management and Financial Update

BOARD OVERSIGHT OF STRATEGY

The board is deeply engaged and involved in overseeing the Company’s long-range strategy, including evaluating key market opportunities, consumer trends, and competitive developments. This also includes aspects of our sustainability initiatives and social impact agenda that relate to our strategy. The board’s oversight of risk is another integral component of the board’s oversight and engagement on strategic matters. Strategy-related matters are regularly discussed at board meetings and, when relevant, at committee meetings. We also dedicate at least one board meeting every year to an even more intensive review and discussion of the Company’s strategic plan. Matters of strategy also inform committee-level discussions of many issues, including business risk. Engagement of the board on these issues and other matters of strategic importance continues in between meetings, including through updates to the board on significant items and discussions by the president and ceo with the independent chair of the board on a periodic basis. Each director is expected to and does bring to bear their own talents, insights, and experiences to these strategy discussions.

BEYOND THE BOARDROOM

In order to increase each director’s engagement with and understanding of our strategy, each director participates in an extensive orientation program upon joining the board, including meeting with members of our executive leadership team and other key leaders of the Company to gain a deeper understanding of Starbucks businesses and operations, attending cultural immersion programs, and visiting our stores to engage with store partners and customers first-hand. Periodic briefing sessions are also provided to members of the board on subjects that would assist them in discharging their duties. Our directors also have the opportunity through our periodic investor day presentations to understand and assess how we are communicating our strategy to our investors and other important stakeholders.

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Risk Oversight

Board of Directors

The board of directors has overall responsibility for risk oversight. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for that company. The involvement of the board in reviewing Starbucks business strategy is an integral aspect of the board’s assessment of management’s tolerance for risk and also its determination of what constitutes an appropriate level of risk for the Company.

While the full board has overall responsibility for risk oversight, the board has delegated oversight responsibility related to certain risks to the Audit Committee, the Compensation Committee, and the Nominating/Governance Committee.

         
         
Audit
Committee
  Compensation
Committee
  Nominating/Governance
Committee

●  Responsible for reviewing and overseeing the Company’s major and emerging risk exposures, including financial, operational, legal, and regulatory risks; discussing the steps the Company is taking to monitor and control such exposures; and overseeing the Company’s risk assessment and risk management policies, including with respect to data privacy and cybersecurity risk exposures.

●  Receives regular reports from management including from our chief financial officer, chief accounting officer, vice president of Internal Audit, general counsel, and chief ethics and compliance officer on risks facing the Company at its regularly scheduled meetings and other reports as requested by the Audit Committee.

 

●  Responsible for reviewing and overseeing the management of any potential material risks related to Starbucks compensation policies and practices, including as they relate to the workforce generally.

●  Oversees the development, implementation, and effectiveness of the Company’s practices, policies, and strategies relating to human capital management regarding recruiting, selection, talent development, progression, and regression, and diversity, equity, and inclusion.

●  Reviews a summary and assessment of such risks annually and in connection with discussions of various compensation elements and benefits throughout the year.

  ●  Oversees risks associated with shareholder concerns, public policy, and regulatory and compliance matters relating to emerging political, environmental, and global citizenship trends, as well as ESG matters.
         

In 2016, the Company’s management established the Risk Management Committee, which is co-managed by Starbucks chief financial officer and general counsel and reports to senior leadership.

The board believes that its leadership structure, coupled with the structure and work of the various committees referenced here, is appropriate and effective in facilitating board-level risk oversight.

Board and Committee Evaluations

Our board is committed to continual corporate governance improvement, and the board and each committee annually conduct a self-evaluation to review and assess the overall effectiveness of the board and each committee, including with respect to strategic oversight, board structure and operation, interactions with and evaluation of management, governance policies and committee structure and composition. Committee self-assessments of performance are shared with the full board. The Nominating/Governance Committee also reviews the Governance Principles each year in light of changing conditions and shareholders’ interests and recommends appropriate changes to the board for consideration and approval. Matters with respect to board composition, the nomination of directors, board processes, and topics addressed at board and committee sessions are also considered part of our self-assessment process. As appropriate, these assessments result in updates or changes to our practices as well as commitments to continue existing practices that our directors believe contribute positively to the effective functioning of our board and its committees. In fiscal 2019, the board established an independent external review process to be conducted every three years, in addition to pre-existing annual board and committee evaluations.

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Affirmative Determinations Regarding Director Independence and Other Matters

Our board conducts an annual review of the independence of our directors. Our board has determined that each of the members of our board, other than Mr. Johnson, is “independent” as that term is defined under the rules of The Nasdaq Stock Market (“Nasdaq”). Our board has also determined that all members of each of our Audit Committee, Compensation Committee, and Nominating/Governance Committee are independent and satisfy the relevant SEC and Nasdaq independence requirements for such committees. In assessing independence, our board determined that none of the members of our board, other than Mr. Johnson, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In determining that Ms. Ge Mahe is independent, the board considered payments in the ordinary course of business in fiscal 2021 between Starbucks and the public company in which she serves as an officer, which were for amounts representing less than 2% of the annual revenues of the company receiving the payments and did not constitute a related party transaction under SEC rules. The board determined that these transactions would not interfere with Ms. Ge Mahe’s exercise of independent judgment in carrying out her responsibilities as a director. Also, in determining that Mr. Nadella is independent, the board considered payments in the ordinary course of business in fiscal 2021 between Starbucks and the public company in which he serves as an executive officer and as a director, which were for amounts representing less than 2% of the annual revenues of the company receiving the payments and did not constitute a related party transaction under SEC rules. The board determined that these transactions would not interfere with Mr. Nadella’s exercise of independent judgment in carrying out his responsibilities as a director. Lastly, in determining that Ms. Shih is independent, the board considered payments in the ordinary course of business in fiscal 2021 between Starbucks and the public company in which she serves as an officer, which were for amounts representing less than 2% of the annual revenues of the company receiving the payments and did not constitute a related party transaction under SEC rules. The board determined that these transactions would not interfere with Ms. Shih’s independent judgement in carrying out her responsibilities as a director.

Succession Planning and Talent Management Oversight

Management Succession Planning

In light of the critical importance of executive leadership to Starbucks success, we have an annual succession planning process. This process is enterprise-wide for managers up to and including our president and ceo.

Our board’s involvement in our annual succession planning process is outlined in our Governance Principles. The Governance Principles provide that our Compensation Committee has general oversight responsibility for management development and succession planning practices and strategy. Our Compensation Committee, pursuant to its charter, annually reviews and discusses with the independent directors of the board the performance of certain senior officers of the Company and the succession plans for each such officer’s position including recommendations and evaluations of potential successors to fill these positions. The Compensation Committee also conducts a periodic review of, and provides approval for, our management development and succession planning practices and strategies, including the review and oversight of risks and exposures associated with the succession planning practices and strategies.

ceo Succession Planning

A primary responsibility of the board is planning for ceo succession. The chair of our Nominating/Governance Committee, together with the

chair of the board (or, if not independent, the lead independent director), the chair of the Compensation Committee, and the president and ceo, annually review ceo succession planning with the board. This review includes a discussion about development plans for the Company’s executive officers and senior officers to help prepare them for future succession and contingency plans in the event our president and ceo ceases to be employed by Starbucks for any reason (including death or disability).

Oversight of ESG

Our board is highly engaged in ESG matters given that our global social impact, sustainability goals, and human capital are intricately linked to our strategic direction. Our board considers these matters at least annually in connection with the strategic plan. In addition, our Nominating/Governance Committee is tasked with the responsibility of overseeing the effectiveness of our environmental, social, and corporate governance strategies, policies, practices, goals, and programs, including review of our annual Global Environmental and Social Impact Report, except where explicitly delegated to other board committees. Further, our Compensation Committee is responsible for overseeing the development and implementation of human capital development plans and succession planning practices to foster sufficient management depth at the Company to support its continued growth and the talent needed to execute long-term strategies, while our Audit Committee is tasked with overseeing the Company’s risk management, including with respect to certain ESG topics.

Board
Our board is responsible for ensuring ESG risks and opportunities are integrated into Starbucks long-term strategy.
 
Nominating/Governance Committee
Oversees, reviews, and assesses the effectiveness of Starbucks ESG strategies, policies, practices, goals, and programs; annually reviews Starbucks corporate political contributions and expenditures to ensure alignment with Starbucks policies and values.
 
Compensation Committee   Audit Committee
Oversees the development, implementation, and effectiveness of Starbucks practices, policies, and strategies relating to human capital management as they relate to Starbucks workforce generally.   Oversees certain ESG risks, as part of overall risk management, and also reviews ESG disclosures in SEC filings.   

 

Data Privacy and Cybersecurity Risk Oversight

We maintain comprehensive technologies and programs to ensure our systems are effective and prepared for data privacy and cybersecurity risks, including regular oversight of our programs for security monitoring for internal and external threats to ensure the confidentiality, availability, and integrity of our information assets. We regularly perform evaluations of our security program and continue to invest in our capabilities to keep our customers, partners, and information assets safe. Our chief information security officer is ultimately responsible for our cybersecurity program, which includes the implementation of controls aligned with industry guidelines and


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applicable statutes and regulations to identify threats, detect attacks, and protect these information assets. We have implemented security monitoring capabilities designed to alert us to suspicious activity and developed an incident response program that includes periodic testing and is designed to restore business operations as quickly and as orderly as possible in the event of a breach. In addition, partners participate in ongoing mandatory annual trainings and receive communications regarding the cybersecurity environment to increase awareness throughout the Company. Our Audit Committee, which oversees data privacy and cybersecurity risk matters, is comprised entirely of independent directors, two of whom have significant work experience related to information security issues and oversight. Management will report security instances to the Audit Committee as they occur, if material, and will also provide a summary multiple times per year to the Audit Committee. Additionally, our chief information security officer meets at least twice annually with the board of directors or the Audit Committee to brief them on technology and information security matters. We carry insurance that provides protection against the potential losses arising from a cybersecurity incident. In the last three years, the expenses we have incurred from information security breach incidences were immaterial. This includes penalties and settlements, of which there were none.

Shareholder Engagement

We have a year-round shareholder outreach program through which we solicit feedback on diverse business areas, ranging from our executive compensation program and corporate governance practices to disclosure practices and environmental and social impact programs and goals. We share feedback we receive with our board of directors, as well as other board committees such as the Compensation Committee and the Nominating/Governance Committee, as appropriate. Our board considers feedback received from shareholders throughout the year, and such input influences changes to our compensation program and the adoption of new governance practices. Every year, our outreach effort is conducted by a cross-functional team including: Investor Relations, Global Total Rewards, Law & Corporate Affairs, Inclusion and Diversity, Public Affairs, Global Social Impact, Global Environmental Sustainability, Global Public Policy, Global Coffee Tea and Cocoa, and Partner Resources Organization. Additionally, our ceo and cfo are engaged in meaningful dialogue with our shareholders through our quarterly earnings calls and investor-related outreach events. For more information about our shareholder engagement, see page 12.

ROLE OF OUR BOARD COMMITTEES

During fiscal 2021, our board of directors had three standing committees: the Audit Committee, the Compensation Committee, and the Nominating/Governance Committee. The board of directors, upon recommendation of the Nominating/Governance Committee, makes committee and committee chair assignments annually at its meeting immediately preceding the annual meeting of shareholders, and makes changes to committee assignments as deemed appropriate by the board. The committees operate pursuant to written charters, which are available on our website at www.starbucks.com/about-us/company-information/corporate-governance.

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS, ANNUAL MEETING

During fiscal 2021, each director attended at least 75% of all meetings of the board and board committees on which they served (held during the period that such director served). In fiscal 2021, our board held six meetings. Our Governance Principles require each board member to attend our annual meeting of shareholders except for absences due to causes beyond the reasonable control of the director. All of the directors who then served on the board attended our 2021 Annual Meeting of Shareholders.


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AUDIT AND COMPLIANCE COMMITTEE

     
Committee Members:   Number of meetings in fiscal 2021: 9
     
Javier G. Teruel (chair)
Andrew Campion
Isabel Ge Mahe
Jørgen Vig Knudstorp
Joshua Cooper Ramo
Report:
page 89
     

The Audit Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Audit Committee are to:

oversee our accounting and financial reporting processes, including focused review of higher-risk areas
appoint the independent registered public accounting firm and oversee the relationship
review the annual audit and quarterly review processes with management and the independent registered public accounting firm
review the Company’s quarterly and annual financial statements with
  management and the independent registered public accounting
review management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s related attestation
oversee the Company’s internal audit function
discuss any material weakness or significant deficiency and any steps taken to resolve the issue
review any significant findings and recommendations from internal audit
review and approve or ratify all transactions with related persons and potential conflicts of interests that are required to be disclosed in the proxy statement
review periodically, discuss with management, and regularly report to the board major and emerging risk exposures, risk assessment, and risk management policies

Each of Mr. Campion, Ms. Ge Mahe, Mr. Knudstorp, Mr. Ramo, and Mr. Teruel served on the Audit Committee during fiscal 2021. In March 2021, when Ms. Hobson was appointed as chair of the board, she stepped down from, and Ms. Ge Mahe joined, the Audit Committee. And as a result of Ms. Hobson stepping down from the Audit Committee, Mr. Teruel was appointed as chair of the Audit Committee. Currently, each of Mr. Campion, Ms. Ge Mahe, Mr. Knudstorp, Mr. Ramo, and Mr. Teruel: (i) meets the independence criteria prescribed by applicable law and the rules of the SEC for audit committee membership and is an “independent director” as defined by Nasdaq rules, and (ii) meets Nasdaq’s financial knowledge and sophistication requirements. Each of Mr. Campion, Mr. Knudstorp, and Mr. Teruel has been determined by the board of directors to be an “audit committee financial expert” under SEC rules. The Audit Committee Report describes in more detail the Audit Committee’s responsibilities with regard to our financial statements and its interactions with our independent auditor, Deloitte & Touche LLP.

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COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE

     
Committee Members:   Number of meetings in fiscal 2021: 6
     
Mary N. Dillon (chair)
Richard E. Allison, Jr.
Andrew Campion
Clara Shih
Javier G. Teruel
Report:
page 79
     

The Compensation Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Compensation Committee are to:

oversee, review, and approve as appropriate, the Company’s overall compensation policies, structure, and programs (including with respect to wages, salaries, bonuses, equity plans, employee benefit plans, and other benefits) for partners and officers
conduct an annual review of, and recommend to the independent directors of the board, the compensation package for the ceo
conduct an annual review and approve the compensation packages for executive officers and senior officers
annually review and approve performance measures and targets for all executive officers and senior officers participating in the annual incentive bonus plan and long-term incentive plans, and certify achievement of such measures and targets
approve, modify, and administer partner-based equity plans, the Executive Management Bonus Plan, and deferred compensation plans
annually establish the evaluation process for reviewing the ceo’s performance
periodically review and approve our management development and succession planning practices
review and approve the Company’s peer group companies and review market data
oversee the development, implementation, and effectiveness of the Company’s practices, policies, and strategies relating to human capital management as they relate to the Company’s workforce generally, including policies and strategies regarding recruiting, selection, talent development, progression and retention, and diversity, equity, and inclusion
provide recommendations to the board on compensation-related proposals to be considered at the Company’s annual meeting
determine stock ownership guidelines and periodically review ownership levels
annually review a report regarding potential material risks, if any, created by the Company’s compensation policies and practices and inform the board of any necessary actions

The charter allows the Compensation Committee to form and delegate any or all of its responsibilities to a subcommittee or subcommittees of the Compensation Committee, as may be necessary or appropriate, and within certain limits. At least annually, the Compensation Committee reviews and approves our executive compensation strategy and principles to confirm that they are aligned with our business strategy and objectives, shareholder interests, desired behaviors, and corporate culture.

Each of Mr. Allison, Mr. Campion, Ms. Dillon, Ms. Shih, and Mr. Teruel served on the Compensation Committee during fiscal 2021. As a result of the annual evaluation of committee memberships and the restructuring of the membership of the committees, in March 2021, Mr. Nadella stepped down from, and Mr. Campion joined, the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is or has been an officer or employee of Starbucks, and no executive officer of Starbucks has served on the compensation committee (or its equivalent) or board of any company that employed any member of our Compensation Committee or board of directors during fiscal year 2021.

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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

     
Committee Members:   Number of meetings in fiscal 2021: 5
     
Jørgen Vig Knudstorp (chair)
Richard E. Allison, Jr.
Mary N. Dillon
Isabel Ge Mahe
Satya Nadella
Joshua Cooper Ramo
 
     

The Nominating/Governance Committee annually reviews and reassesses the adequacy of its charter and recommends any proposed changes to the charter to the board for approval. As more fully described in its charter, the primary responsibilities of the Nominating/Governance Committee are to:

make recommendations to the board regarding board leadership and membership and chairs of the board’s committees
make recommendations to the board about our corporate governance processes
assist in identifying and screening board candidates, administer the Policy on Director Nominations, and consider shareholder nominations to the board
annually assess the evaluation process for the effective performance of the governance responsibilities of the board and its committees and recommend any changes to that process to the board
annually review board compensation for independent directors
annually review corporate political contributions and expenditures
provide recommendations to the board on shareholder proposals to be considered at the Company’s annual meeting
annually review and assess the effectiveness of the Company’s ESG strategies, policies, practices, goals, and programs and make recommendations as appropriate

Mr. Allison, Ms. Dillon, Ms. Ge Mahe, Mr. Knudstorp, Mr. Nadella, and Mr. Ramo served on the Nominating/Governance Committee during fiscal 2021. As a result of the annual evaluation of committee memberships and the restructuring of the membership of the committees, in March 2021, Ms. Shih stepped down from, and Mr. Allison and Mr. Nadella joined, the Nominating/Governance Committee.

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OUR DIRECTOR NOMINATIONS PROCESS

Our Policy on Director Nominations is available at www.starbucks.com/about-us/company-information/corporate-governance. The purpose of the nominations policy is to describe the process by which candidates are identified and assessed for possible inclusion in our recommended slate of director nominees (the “candidates”). The nominations policy is administered by the Nominating/Governance Committee.

Minimum Criteria for Board Members

Each candidate must possess at least the following specific minimum qualifications:

each candidate shall be prepared to represent the best interests of all shareholders and not just one particular constituency or any entity with which the candidate may be affiliated;
each candidate shall be an individual who has demonstrated integrity and ethics in their personal and professional life and has established a record of professional accomplishment in their chosen field;
no candidate, or family member (as defined in Nasdaq rules), affiliate, or associate (as defined under federal securities laws) of a candidate, shall have any material personal, financial, or professional interest in any present or potential competitor of Starbucks;
each candidate shall be prepared to participate fully in board activities, including active membership on at least one board committee and attendance at, and active participation in, meetings of the board and the committee(s) of which they are a member, and not have other personal or professional commitments that would, in the Nominating/Governance Committee’s sole judgment, interfere with or limit their ability to do so;
each candidate shall intend to serve as a director at least until the next annual meeting of shareholders or until a successor has been qualified and preferably would intend to make a long-term commitment to serve on the board if re-nominated;
each candidate shall acknowledge and comply with the Company’s confidentiality, corporate governance, and other policies and guidelines applicable to directors;
each candidate shall be willing to make, and financially capable of making, the required investment in our stock in the amount and within the time frame specified in the director stock ownership guidelines described in this proxy statement;
each candidate shall not have made any commitments or assurance to any person as to how the candidate would vote or act on any issue or question that has not been disclosed to the Company (with the understanding that the existence of any such commitment or assurance to a third party is likely to be deemed disqualifying by the Nominating/Governance Committee) nor any such commitments or assurances that could limit or interfere with the candidate’s ability to comply with their fiduciary duties; and
each candidate will not be a party to any compensation or incentive arrangements with any person or entity other than the Company with respect to service or action as a director that has not been disclosed to the Company (with the understanding that the existence of any such arrangement is likely to be deemed disqualifying by the Nominating/Governance Committee in light of the conflicts that may result).

Desirable Qualities and Skills

In addition, the Nominating/Governance Committee also considers it desirable that candidates possess the following qualities or skills:

each candidate should contribute to the board of directors’ overall diversity - diversity being broadly construed to mean a variety of identities, perspectives, and personal and professional experiences and backgrounds. This can be represented in both visible and non-visible characteristics that include but are not limited to race, ethnicity, national origin, gender, and sexual orientation. In addition, each candidate should affirm a commitment to furthering inclusion and diversity;
each candidate should contribute positively to the existing chemistry and collaborative culture among board members; and
each candidate should possess professional and personal experiences and expertise relevant to our goal of being one of the world’s leading consumer brands. At this stage of our development, relevant experiences might include, among other qualifications or experience as the Nominating/Governance Committee shall deem appropriate: sitting chief executive officer of a large global company; large-company chief executive officer experience; international chief executive officer experience; senior-level international experience; senior-level consumer products, food, food service, and beverage industry experience; multi-unit small box retail or restaurant experience; technology expertise; and relevant senior-level expertise in one or more of the following areas: finance, accounting, branding, sales and marketing, organizational development, international or large-scale operations, logistics and distribution, information technology, social media, public relations, sustainability, and public policy. Public company board experience is also valued.

The Nominating/Governance Committee is responsible for reviewing the appropriate skills and characteristics required of directors in the context of prevailing business conditions and existing competencies on the board, and for making recommendations regarding the size and composition of the board, with the objective of having a board that brings to Starbucks a variety of perspectives and skills derived from high quality business and professional experience. The Nominating/ Governance Committee’s review of the skills and experience it seeks in the board as a whole, and in individual directors, in connection with its review of the board’s composition, enables it to assess the effectiveness of its goal of achieving a board with a diversity of experiences. The Nominating/Governance Committee considers these criteria when evaluating director nominees.


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Internal Process for Identifying Candidates

The Nominating/Governance Committee has two primary methods for identifying candidates (other than those proposed by shareholders, as discussed later).

1   The Nominating/Governance Committee may use its authority under its charter to retain at our expense one or more search firms to identify candidates (and to approve such firms’ fees and other retention terms), to assist in the identification of possible candidates to serve on our board who meet the minimum and desired qualifications being sought in candidates, interview and screen such candidates (including conducting reference checks), and assist in scheduling candidate interviews with board members. To reflect the Company’s commitment to diversity, in connection with the use of any search firm to identify potential candidates, the Nominating/Governance Committee will require the search firm to include in its initial list of candidates qualified candidates who reflect diverse backgrounds, including, but not limited to, diversity of race, ethnicity, national origin, gender, and sexual orientation.
     
     
2   On a periodic basis, the Nominating/Governance Committee solicits ideas for possible candidates from a number of sources: members of the board; senior-level Starbucks executives; advisors to the Company (including the board); individuals personally known to the members of the board; and research, including database and Internet searches.

Shareholder Nominations

The nominations policy divides the process for candidates proposed by shareholders into the general nomination right of all shareholders and proposals by “qualified shareholders” (as described below).

General Nomination Right of All Shareholders

Any registered shareholder may nominate one or more persons for election as a director at an annual meeting of shareholders if the shareholder complies with the advance notice, information, and consent provisions contained in our bylaws. See our Proposals of Shareholders section on page 97 for more information.

The procedures described in “Director Recommendations by Qualified Shareholders” below are meant to establish an additional means by which certain shareholders can contribute to our process for identifying and evaluating candidates and is not meant to replace or limit shareholders’ general nomination rights in any way.

Director Recommendations by Qualified Shareholders

In addition to those candidates identified through its own internal processes, in accordance with the nominations policy, the Nominating/Governance Committee will evaluate a candidate proposed by any single shareholder or group of shareholders that has beneficially owned more than 5% of our common stock for at least one year (and will hold the required number of shares through the annual meeting of shareholders) and that satisfies the notice, information, and consent provisions in the nominations policy (a “qualified shareholder”). Any candidate proposed by a qualified shareholder must be independent of the qualified shareholder in all respects as determined by the Nominating/Governance Committee and by applicable law. Any candidate submitted by a qualified shareholder must also meet the definition of an “independent director” under Nasdaq rules.

In order to be considered by the Nominating/Governance Committee for an upcoming annual meeting of shareholders, notice from a qualified shareholder regarding a potential candidate must be received by the Nominating/Governance Committee not less than 120 calendar days before the anniversary of the date of our proxy statement released to shareholders in connection with the previous year’s annual meeting.

Proxy Access

In addition, our bylaws permit a shareholder, or a group of up to 20 shareholders, owning at least 3% of the Company’s outstanding shares of common stock continuously for at least three years, to nominate and include in our annual meeting proxy materials director nominees

constituting up to the greater of two nominees or 20% of the board, subject to the requirements specified in our bylaws.

Evaluation of Candidates

The Nominating/Governance Committee will consider and evaluate all candidates identified through the processes described above, including incumbents and candidates proposed by qualified shareholders, based on the same criteria.

Future Revisions to the Policy on Director Nominations

The Policy on Director Nominations is intended to provide a set of flexible guidelines for the effective functioning of our director nominations process. The Nominating/Governance Committee reviews the nominations policy at least annually and makes modifications as our needs and circumstances evolve, and as applicable legal or listing standards change. The Nominating/Governance Committee may amend the nominations policy at any time, in which case the most current version will be available on our website.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Review and Approval of Related Person Transactions

Under the Audit Committee’s charter, and consistent with Nasdaq rules, any material potential or actual conflict of interest or transaction between Starbucks and any “related person” of Starbucks must be reviewed and approved or ratified by the Audit Committee. SEC rules define a “related person” of Starbucks as any Starbucks director (or nominee), executive officer, 5%-or-greater shareholder, or an immediate family member of any of these persons.

Our board of directors has adopted a written Policy for the Review and Approval of Related Person Transactions Required to Be Disclosed in Proxy Statements, which states that it is the policy of Starbucks not to participate in “related person” transactions. In select circumstances, if the transaction provides Starbucks with a demonstrable and significant strategic benefit that is in the best interests of Starbucks and its shareholders and has terms that are competitive with terms available from unaffiliated third parties, then the Audit Committee may approve the transaction. The policy also provides that any “related person” as defined above must notify the chair of the Audit Committee before becoming a party to, or engaging in, a potential related person


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CORPORATE GOVERNANCE

transaction that may require disclosure in our proxy statement under SEC rules, or if prior approval is not practicable, as soon as possible after engaging in the transaction. Based on current SEC rules, transactions covered by the policy include:

any individual or series of related transactions, arrangements, or relationships (including, but not limited to, indebtedness or guarantees of indebtedness), whether actual or proposed;
in which Starbucks was or is to be a participant;
the amount of which exceeds $120,000; and
in which the related person has or will have a direct or indirect material interest. Whether the related person has a direct or indirect material interest depends on the significance to investors of knowing the information in light of all the circumstances of a particular case. The importance to the person having the interest, the relationship of the parties to the transaction with each other, and the amount involved in the transaction are among the factors to be considered in determining the significance of the information to investors.

The chair of the Audit Committee has the discretion to determine whether a transaction is or may be covered by the policy. If the chair determines that the transaction is covered by the policy, then the transaction is subject to full Audit Committee review and approval. The Audit Committee’s decision is final and binding. Additionally, the chair of the Audit Committee has discretion to approve, disapprove, or seek full Audit Committee review of any immaterial transaction involving a related person (i.e. a transaction not otherwise required to be disclosed in the proxy statement).

In considering potential related person transactions, the Audit Committee looks to SEC and Nasdaq rules, including the impact of a transaction on the independence of any director. Once the Audit Committee has determined that (i) the potential related person transaction will provide Starbucks with a demonstrable and significant strategic benefit that is in the best interests of Starbucks and its shareholders and (ii) that the terms of the potential related person transaction are competitive with terms available from unaffiliated third parties, the Audit Committee may consider other factors such as:

whether the transaction is likely to have any significant negative effect on Starbucks, the related person, or any Starbucks partner;
whether the transaction can be effectively managed by Starbucks despite the related person’s interest in it;
whether the transaction would be in the ordinary course of our business; and
the availability of alternative products or services at comparable prices.

Related Person Transactions Since the Beginning of Fiscal 2021

There are no related person transactions in fiscal 2021 required to be reported in this proxy statement under the applicable SEC rules.

CORPORATE GOVERNANCE MATERIALS AVAILABLE ON THE STARBUCKS WEBSITE

Our Governance Principles are intended to provide a set of flexible guidelines for the effective functioning of the board of directors and are reviewed regularly and revised as necessary or appropriate in response to changing regulatory requirements, evolving best practices, and other considerations. They are posted on the Corporate Governance section of our website at www.starbucks.com/about-us/company-information/corporate-governance.

In addition to our Governance Principles, other information relating to corporate governance at Starbucks is available on the Corporate Governance section of our website, including:

Restated Articles of Incorporation
Amended and Restated Bylaws
Audit and Compliance Committee Charter
Compensation and Management Development Committee Charter
Nominating and Corporate Governance Committee Charter
Policy on Director Nominations
Standards of Business Conduct (applicable to directors, officers, and partners)
Code of Ethics for CEO, COO, CFO, and Finance Leaders
Procedure for Communicating Complaints and Concerns
Audit and Compliance Committee Policy for Pre-Approval of Independent Auditor Services

You may obtain print copies of these materials, free of charge, by sending a written request to: Starbucks Corporation, 2401 Utah Avenue South, Mail Stop S-LA1, Seattle, Washington 98134, Attention: corporate secretary. Please specify which documents you would like to receive.

CONTACTING THE BOARD OF DIRECTORS

The Procedure for Communicating Complaints and Concerns describes the manner in which interested persons can send communications to our board of directors, the committees of the board, and to individual directors, and describes our process for determining which communications will be relayed to board members. Interested persons may telephone their feedback by calling the Starbucks Audit line at 1-800-300-3205 or sending written communications to the board, committees of the board, and individual directors by mailing those communications to our third-party service provider for receiving these communications at:

Starbucks Corporation
P.O. Box 34507
Seattle, Washington 98124

Shareholders may address their communications to an individual director, to the board of directors, or to one of our board committees.


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Compensation of Directors

FISCAL 2021 COMPENSATION PROGRAM FOR NON-EMPLOYEE DIRECTORS

Under its charter, the Nominating/Governance Committee annually reviews and recommends the type and amount of board compensation for non-employee directors. Compensation decisions for non-employee directors are made by the Nominating/Governance Committee for each “Plan Year,” as defined in the Deferred Compensation Plan for Non-Employee Directors, which begins after the annual meeting of shareholders and concludes immediately before the following annual meeting of shareholders.

Director Compensation Highlights

Additional fees for board chair and committee chairs to differentiate individual pay based on workload.
Emphasis on equity in the overall compensation mix.
Equity grants under a fixed-value annual grant policy with immediate vesting.
A robust stock ownership guideline set at five times the portion of the annual retainer that can be paid in cash to support shareholder alignment.
Deferred stock unit program to facilitate stock ownership.

2021 Plan Year Compensation (March 2021 – March 2022)

Our non-employee director compensation was $295,000 for the 2021 Plan Year, and was paid at the election of the director as follows: (i) $130,000 either entirely in cash (in one lump sum) or entirely in fully-vested restricted stock units (“RSUs”) and (ii) $165,000 either entirely in fully-vested stock options or entirely in fully-vested RSUs. Additional compensation for the non-executive chair of the board and chairs of the board’s committees (other than Audit Committee) remained unchanged at $185,000 and $20,000, respectively, payable entirely in cash or entirely in fully-vested RSUs, at the election of the director. In June 2020, upon the recommendation of the Nominating/Governance Committee, the board increased the annual retainer for the chair of the Audit Committee by $5,000 for fiscal 2021, for a total of $25,000, payable entirely in cash or entirely in fully-vested RSUs, at the election of the director. A single board member who occupies both the non-executive chair of the board role and a chair of a committee role shall receive only the additional compensation specified for their role as non-executive board chair.

In considering and ultimately recommending the above change to the compensation program for our non-employee directors, the Nominating/Governance Committee considered peer data, analysis, and recommendations provided by F.W. Cook, an independent compensation consulting firm. Under F.W. Cook’s engagement with the Compensation Committee, as discussed in the “Our Executive Compensation Process” section of the proxy statement on page 74. The peers considered were the same peer group used to benchmark executive compensation.

Terms of Non-Employee Director Equity

Stock options have an exercise price equal to the closing market price of our common stock on the grant date and have a 10-year term from the date of grant. Stock options and RSUs granted to non-employee directors in Plan Year 2021 vested immediately. Directors generally have 36 months to exercise their stock options after ceasing to be a board member.

With respect to RSUs, elective deferral will continue to be available for “in-service” or “separation” as described on the next page. With respect to stock options, the number of options awarded to non-employee directors who elect to receive a portion of their compensation in options will be based on the grant date fair value of the stock options as determined for our financial reporting purposes at the time of grant, whereas the number of stock options granted was previously based on a widely-used approximation of the relative value of stock options when compared to cash and RSUs. Non-employee directors are expected to satisfy stock ownership guidelines of five times the maximum portion of annual compensation that can be paid in cash, not including cash payable as additional retainer for serving as chair of the board or for serving as a committee chair, as discussed below under the caption “Director Stock Ownership Guidelines.”


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COMPENSATION OF DIRECTORS

FISCAL 2021 NON-EMPLOYEE DIRECTOR COMPENSATION TABLE

The following table shows fiscal 2021 compensation for non-employee directors.

Name(1)       Fees Earned or
Paid in Cash
($)
      Stock
Awards ($)(2)
      Option
Awards
($)(3)(4)
      Total
($)
    
Richard E. Allison, Jr.     $294,928     $294,928  
Andrew Campion     $294,928     $294,928  
Mary N. Dillon     $149,894   $142,549   $292,443  
Isabel Ge Mahe     $294,928     $294,928  
Mellody Hobson(5)     $479,949     $479,949  (5)  
Jørgen Vig Knudstorp     $149,894   $142,549   $292,443  
Satya Nadella     $294,928     $294,928  
Joshua Cooper Ramo     $294,928     $294,928  
Clara Shih     $129,901   $142,549   $272,450  
Javier G. Teruel     $154,975   $142,549   $297,524  
Myron E. Ullman, III   $157,500       $157,500  (6)  
   
(1) Mr. Johnson does not participate in the compensation program for non-employee directors but rather is compensated as an executive officer of Starbucks. Information on compensation paid to Mr. Johnson in fiscal 2021 is described in the CD&A section of this proxy statement.
(2) The amounts shown in this column represent the grant date fair values of the RSU awards granted to each of the non-employee directors on March 17, 2021. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Company’s fiscal 2021 Annual Report (Note 13: Employee Stock and Benefit Plans).
(3) The amounts shown in this column represent the grant date fair values of the stock option awards granted to each of the non-employee directors on March 17, 2021. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Company’s fiscal 2021 Annual Report (Note 13: Employee Stock and Benefit Plans).
(4) As of October 3, 2021, the aggregate number of shares of Starbucks common stock underlying outstanding option awards for each non-employee director were: Mr. Allison, 0; Mr. Campion, 0; Ms. Dillon, 32,108; Ms. Ge Mahe, 0; Ms. Hobson, 0; Mr. Knudstorp, 49,289; Mr. Nadella, 6,876; Mr. Ramo, 0; Ms. Shih, 5,166; and Mr. Teruel, 87,635.
(5) Although Ms. Hobson was the chair of the Audit Committee for a portion of fiscal 2021, she is not entitled to the additional annual compensation generally awarded to committee chairs due to the fact that Ms. Hobson previously served as the non-executive vice chair of the board. Any non-executive chair or non-executive vice chair of the board, who is also a chair of a board committee, is not entitled to this additional annual compensation.
(6) Mr. Ullman retired from the board on March 17, 2021. The amount shown for Mr. Ullman represents the portion of his cash fees that was earned in fiscal 2021 prior to his retirement from the board.

Deferred Compensation Plan

Under the Deferred Compensation Plan for Non-Employee Directors, a non-employee director may irrevocably elect to defer receipt of shares of common stock the director would have received upon vesting of RSUs until (1) the earlier of three years from the vesting of the RSU and separation from the board or (2) separation from the board. The purpose of the plan is to enhance the Company’s ability to attract and retain non-employee directors by providing individual financial and tax planning flexibility.

Director Stock Ownership Guidelines

In June 2018, the board increased the minimum Company stock ownership guidelines for non-employee directors from $480,000 to five

times the maximum portion of annual compensation that can be paid in cash, not including cash payable as additional retainer for serving as chair of the board or for serving as a committee chair. The guidelines serve to align the interests of our non-employee directors to those of our shareholders. Under this formula, the current ownership requirement is $650,000 (5 x $130,000) of Company stock. Directors have a period of five years to comply with this requirement.

Deferred stock units resulting from deferrals under the deferred compensation plan for non-employee directors described above are counted toward meeting the guidelines. Each director is expected to continue to meet the ownership requirement for as long as they serve as a non-employee director of the board. All current non-employee directors are in compliance with these guidelines as of the date of this proxy statement.


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PROPOSAL 2

APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

We are asking our shareholders to approve an amendment and restatement of our 2005 Long-Term Equity Incentive Plan (the “Amended Plan”), to, among other things, increase the number of shares that are reserved under the plan and eliminate the termination date of the plan. In this proposal, we refer to the Amended Plan as previously approved by shareholders as the “Equity Plan.” The Amended Plan also includes a number of other changes to the Equity Plan, which are described in more detail below.

Key Changes from the Original Plan

If approved, the Amended Plan would make the following material changes to the Equity Plan, as described in more detail under the “Amended Plan Summary” below:

Increase in Authorized Shares       Increase the number of shares authorized for issuance under the Equity Plan by 65 million additional shares
Eliminate Termination Date   Eliminate the term of the Equity Plan, which would otherwise expire in March 2023
Extend Incentive Stock Option Term   Extend the term under which incentive stock options may be granted until November 9, 2031
Require Minimum Vesting on All Types of Equity Awards   Revise the current minimum vesting requirement to require 95% of the shares available for future issuance after the Equity Plan is amended and restated to be granted pursuant to equity awards that will not vest prior to the one-year anniversary of the grant date
Eliminate References to 162(m)   Eliminate references to Section 162(m) of the Internal Revenue Code (“Code”) since the exemption is no longer available under the tax rules; however, the Amended Plan would retain material Section 162(m) requirements to ensure good governance
Expand Performance Criteria   Expand the list of potential performance criteria to also include the key performance metrics included in our recent earnings releases and allow for additional types of adjustments to performance awards
Clarify no Payout of Dividends or Dividend Equivalents on Unearned Full Value Awards   Clarify that no dividends or dividend equivalents may be paid on any unvested restricted stock or stock unit awards (whether performance- or time-based) and that the Amended Plan does not permit dividend equivalents or otherwise with respect to stock options and stock appreciation rights (“SARs”), whether vested or unvested
Clarify that the Amended Plan Does Not Permit Liberal Share Recycling   Clarify that shares withheld to pay taxes upon the vesting/settlement of stock awards will not return back to the Amended Plan
Clarifying Administrative and Other Changes   Clarify that stock awards granted under the Amended Plan are subject to any vesting or transferability policies adopted by the plan administrator
    Clarify that the plan administrator has the broad discretion to determine the value of shares withheld to pay taxes
    Clarify that the acceleration of performance-based options and SARs in the event of a change in control will be limited to target achievement
    Clarify that fractional shares may be issued pursuant to the Amended Plan
    Eliminate references to prior equity plans and prior shareholder approved repricing, which are no longer applicable

 

Board Recommendation
The board of directors recommends a vote FOR approval of the amendment and restatement of our 2005 Long-Term Equity Incentive Plan.

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PROPOSAL 2 – APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

Purpose of Share Reserve Increase and Elimination of Termination Date

The Amended Plan would increase the number of shares of common stock reserved for issuance under the Equity Plan by 65 million shares and would not have a termination date. As of October 3, 2021, approximately 41 million shares of our common stock remained available for future grants under the Equity Plan. We believe that the current share reserve amount is insufficient to meet our future needs with respect to attracting, motivating, and retaining partners (employees), officers, and directors in a competitive market for talent. Further if the Amended Plan is not approved, the Equity Plan will remain in effect and expire pursuant to its terms in March 2023.

The Equity Plan is the plan we use to make grants of stock to all of our eligible global partners, including those that participate in our broad-based equity program, which we refer to as our “Bean Stock” plan. Participants in this plan include those partners that work in our stores and serve our customers directly. Our non-employee directors and consultants are also eligible to participate in the Equity Plan. Broad-based equity compensation is an essential and long-standing element of the Company’s culture and success. It continues to be a critical element to attract and retain the most talented partners, officers, and directors available to execute on the Company’s long-term goals. If the Amended Plan is not approved, we may be unable to continue to offer competitive equity packages to attract and retain such persons, and we may need to consider other compensation alternatives.

The table below shows the stock awards that were outstanding under the Equity Plan, as of January 2, 2022. As of that date, there are no stock awards outstanding under any other equity plan maintained by the Company except for its 1995 Employee Stock Purchase Plan. As of January 2, 2022, the closing price of Starbucks shares as reported on Nasdaq was $116.97 per share.

Total shares underlying outstanding options       4,617,527
Weighted average exercise price of outstanding options (includes options that were previously subject to performance conditions)   54.9317
Weighted average remaining contractual life of outstanding options   4.23 Years
Total shares underlying outstanding unvested time-based RSUs   6,568,075
Total shares underlying outstanding unearned performance-based RSUs   1,132,031
Total shares currently available for grant   34,386,285
Total shares currently available for grant as full-value awards   16,374,421

We believe the requested shares will be sufficient to enable us to grant stock awards under the Amended Plan for approximately the next 10 years, based on historical grant and forfeiture levels, recent market prices of Starbucks shares, and the anticipated use of stock awards as an incentive and retention tool.

Dilution, Burn Rate, and Equity Overhang

The Compensation Committee regularly reviews our burn rate and equity overhang activity in order to thoughtfully manage our long-term shareholder dilution. The following table provides detailed information regarding our burn rate and equity overhang activity for the last three fiscal years, which, in the interest of transparency, includes the impact of the $1.7 billion and $10.22 billion of share repurchases that we made in fiscal years 2020 and 2019, respectively.

        Fiscal 2021 (%)       Fiscal 2020 (%)       Fiscal 2019 (%)
Gross Burn Rate(1)   0.35 %   0.34 %   0.51 %
Net Burn Rate(2)   0.22 %   0.24 %   0.23 %
Equity Overhang(3)   4.37 %   5.17 %   6.08 %
(1) Gross burn rate is calculated as (a) the number of new stock awards granted under the Equity Plan divided by (b) the total number of Starbucks shares outstanding as of the end of the fiscal year.
(2) Net burn rate is calculated as (a) the number of new stock awards granted under the Equity Plan, net of stock awards cancelled and forfeited, divided by (b) the total number of Starbucks shares outstanding as of the end of the fiscal year.
(3) Equity overhang is calculated as (a) the number of shares subject to outstanding stock awards plus the number of shares available for grant under the Equity Plan divided by (b) the number of shares subject to outstanding stock awards, plus the number of shares available for grant under the Equity Plan, plus the total number of Starbucks shares outstanding as of the end of the fiscal year.

The table below shows the number of options and full value awards granted in each of the last three years as well as the number of performance-based awards that were earned each year.

Fiscal Year   Option
Awards
Granted
  Time-
Based
Options
Granted
  Performance
-Based
Options
Granted(1)
  Performance-
based
Options
Earned
  Total Full-
Value
Awards
Granted
  Time-
Based
RSUs
Granted
  Performance-
Based RSUs
Granted(1)
  Performance-
based RSUs
Earned(2)
2021   20,664   20,664   0   0   4,151,453   3,707,959   443,494   0
2020   60,020   60,020   0   0   3,973,898   3,444,412   529,486   0
2019   502,918   35,628   467,290   467,290   5,560,091   4,891,047   669,044   0
(1) Amounts are reflected at target.
(2) The new performance-based RSU plan design with three-year performance period was implemented in fiscal 2019. This is not reflected in this table as earned, as the payout was certified, and subsequent vest event occurred in early fiscal 2022. Performance-based RSUs from prior grants that were to be earned in fiscal 2019 did not meet the performance threshold thus no performance-based RSUs were earned.

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PROPOSAL 2 – APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

Best Practices

We have designed the Amended Plan to include a number of provisions that we believe promote best practices by reinforcing the alignment between equity compensation arrangements for non-employee directors, officers, partners, and other service providers and shareholders’ interests. These provisions include, but are not limited to, the following:

No Discounted Options or SARs. Stock options and SARs may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date.

No Repricing Without Shareholder Approval. The Company cannot, without shareholder approval, reduce the exercise price of a stock option or SAR, and at any time when the exercise price of a stock option or SAR is above the market value of the Company’s common stock, the Company cannot, without shareholder approval, cancel and re-grant or exchange such stock option or SAR for cash, other awards, or a new stock option or SAR at a lower (or no) exercise price.

Minimum Vesting Requirements. Stock awards granted under the Amended Plan following the 2022 Annual Meeting will not vest prior to the one-year anniversary of the grant date provided that such requirement will not apply to (i) 5% of the shares initially reserved under the Amended Plan, (ii) awards assumed or substituted in connection with an acquisition by the Company, and (iii) any awards to non-employee directors, which vest on the earlier of one year and the next annual meeting of shareholders, which is at least 50 weeks after the immediately preceding annual meeting of shareholders.

No Liberal Share Recycling. Shares retained by or delivered to the Company to pay the exercise price or purchase price of an award, shares delivered to or withheld by the Company to pay withholding taxes related to an award, unissued shares resulting from the settlement of SARs in stock, and shares purchased by us in the open market using the proceeds of option exercises do not become available for issuance as future awards under the Amended Plan.

No Dividends on Unearned Awards. The Amended Plan prohibits the payment of dividends or dividend equivalent rights on unearned full value awards (whether performance- or time-based). The Amended Plan does not permit dividend equivalents or otherwise with respect to stock options and SARs, whether vested or unvested.

Fungible Share Design. Shares issued in connection with restricted stock and RSUs count against the number of shares authorized for issuance under the Amended Plan at a higher rate than shares issued upon exercise of stock options and SARs.

Best Practice Performance-Based Stock Award Provisions. While the enactment of the 2017 Tax Cuts and Jobs Act eliminated the “performance-based compensation” exception under Section 162(m) of the Code, the Amended Plan includes many best practice performance-based stock award provisions.

Limit on Stock Awards. The Amended Plan limits the number of shares that may be granted to any one participant during any one fiscal year.

Disclosure of Change of Control Vesting Treatment. The Amended Plan discloses the specific vesting treatment for both time- and performance-based stock awards in connection with a change of control.

No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution, unless approved by the Compensation Committee.

No Evergreen Provision. There is no “evergreen” feature pursuant to which the shares authorized for issuance under the Amended Plan can be automatically replenished.

No Automatic Grants. The Amended Plan does not provide for “reload” or other automatic grants to participants.

No Tax Gross-ups. The Amended Plan does not provide for any tax gross-ups.

Amended Plan Summary

The following summary of the material terms of the Amended Plan is qualified in its entirety by reference to the complete text of the Amended Plan, which is set forth in Appendix B to this proxy statement.

Background and Best Practices

On November 9, 2021, the board of directors adopted the Amended Plan, subject to shareholder approval. The board recommends that the Company’s shareholders approve the Amended Plan because it believes that partner, officer, and non-employee director ownership in the Company serves the best interests of all shareholders by promoting a focus on long-term increase in shareholder value. The Amended Plan continues to support this goal by increasing the flexibility the Company has in awarding equity-based compensation that meets its ongoing objective of aligning compensation with shareholder value. The Amended Plan permits the grant of stock options (including nonqualified stock options and incentive stock options), SARs, restricted stock, and RSUs.

Administration

The Compensation Committee will administer the Amended Plan, with certain actions subject to the review and approval of the full board or a panel consisting of all of the independent directors (the “Administrator”). Subject to the express terms of the Amended Plan, the Administrator will have full power and authority to do all things that it determines to be necessary or appropriate in connection with the administration of the Amended Plan, including to determine when and to whom awards will be granted, and the type, amount, form of payment, and other terms and conditions of each award. In addition, the Administrator will have the authority to interpret the Amended Plan and the awards granted under the Amended Plan, and establish rules and regulations for the administration of the Amended Plan. All decisions, determinations, and interpretations of the Administrator regarding the Amended Plan and awards granted under the Amended Plan will be final and binding on all participants and all other persons. The Administrator may authorize one or more officers of the Company to perform any or all things that the Administrator is authorized and empowered to do or perform under the Amended Plan. In addition, subject to applicable law, the Administrator may delegate any or all aspects of the day-to-day administration of the Amended Plan to one or more officers of the Company.

Participants

Any person who is a partner, officer, consultant, or director of the Company or any subsidiary of the Company will be eligible for selection by the Administrator for the grant of awards under the Amended Plan. Options intended to qualify as incentive stock options (“ISOs”) within the meaning of Section 422 of the Code only may be granted to partners of the Company or any subsidiary. As of January 2, 2022, approximately 250,000 partners, seven executive officers, 10 non-employee directors, and approximately 725 consultants were qualified to participate in the Equity Plan and will be eligible to participate in the Amended Plan.


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PROPOSAL 2 – APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

Shares Subject to the Amended Plan and to Awards

As of October 3, 2021, the aggregate number of shares of Starbucks common stock, par value $0.001 per share, subject to outstanding awards under the Equity Plan was 12,880,536, and 41,035,135 shares remained available for future grant under the Equity Plan. Under the Amended Plan, an additional 65,000,000 shares of common stock will become available for issuance. As a result, on or after October 3, 2021, the number of shares authorized for issuance under the Amended Plan shall be 106,035,135 plus any shares that are subject to outstanding awards under the Equity Plan that after such date cease to be subject to such awards for any reason other than the exercise of such awards. Any shares granted under options or SARs will be counted against this limit on a one-for-one basis and any shares granted as awards other than options or SARs will be counted against this limit as 2.1 shares for every one share subject to such award. All share amounts authorized under the Amended Plan will be subject to adjustment for stock splits and other changes in the Company’s capitalization. The shares issued pursuant to awards granted under the Amended Plan may be shares that are authorized and unissued or issued shares that were reacquired by the Company. Subject to certain adjustments, the aggregate number of shares subject to awards granted under the Amended Plan during any one taxable year to any one participant will not exceed 10,000,000, and the aggregate number of shares that may be issued pursuant to the exercise of ISOs granted under the Amended Plan will not exceed 69,612,358. In the case of a stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding shares as a class without the Company’s receipt of consideration, the Administrator shall adjust (i) the maximum number of shares reserved for issuance under the Amended Plan, (ii) the number and class of securities covered by, and the price per share under, outstanding awards, (iii) the maximum annual individual award limit, and (iv) the maximum aggregate ISO limit. Any such adjustments shall be made in order to prevent dilution or enlargement of the benefits or potential benefits intended to be provided under the Amended Plan.

For purposes of determining the share limits described in the paragraphs above, the aggregate number of shares issued under the Amended Plan at any time will equal only the number of shares actually issued upon exercise or settlement of an award. Shares subject to awards that have been canceled, expired, forfeited, settled in cash, or otherwise not issued under an award, and shares subject to awards settled in cash will not count as shares issued under the Amended Plan. The Amended Plan provides that shares retained by or delivered to the Company to pay the exercise price or purchase price of an award, shares delivered to or withheld by the Company to pay withholding taxes related to an award, unissued shares resulting from the settlement of SARs in stock, and shares purchased by us in the open market using the proceeds of option exercises do not become available for issuance as future awards under the Amended Plan.

Fractional shares and related award may be issued pursuant to the Amended Plan or in settlement of awards granted under the Amended Plan, and adjustments for stock splits and other changes in the Company’s capitalization may result in fractional Shares.

Minimum Vesting

Prior to the amendment and restatement, the Equity Plan provided that subject to certain exceptions, restricted stock and RSU awards to the executive officers of the Company that vest solely based on a participant’s continuous service may not vest in full earlier than three years from the grant date, and awards of restricted stock and RSUs to executive officers of the Company that vest based on the achievement of performance objectives must be based on performance over a period of not less than one year, in each case, unless accelerated in the event of a change of control or the participant’s death, disability, or retirement. The Equity Plan did not include a minimum vesting requirement for all awards, and time-based restricted stock and RSU awards to executive officers could vest in part prior to the one-year anniversary of the date of grant.

If the Amended Plan is approved, all Awards granted under the Amended Plan after the 2022 Annual Meeting will not vest in whole or in part prior to the one-year anniversary of the date of grant, excluding, for this purpose, any (i) awards that are substituted or assumed in connection with an acquisition by the Company and (ii) awards to non-employee directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of shareholders, which is at least 50 weeks after the immediately preceding annual meeting of shareholders; provided, however, that up to 5% of the shares available for future distribution under the Amended Plan immediately following the 2022 Annual Meeting may be granted pursuant to awards without such minimum vesting requirement. However, the Administrator will retain the ability to grant awards that are subject to agreements providing for accelerated vesting on a termination of employment or service or to otherwise accelerate vesting. Further, such minimum vesting requirement will not limit any rights to accelerated vesting in connection with a change of control (including vesting acceleration in connection with employment termination following such event), the death of the participant, the disability of the participant, or the participant’s retirement, whether set forth in the Equity Plan, an agreement, or otherwise.

Stock Options

The holder of an option will be entitled to purchase a number of shares of common stock at a specified exercise price during a specified time period, all as determined by the Administrator, subject to the satisfaction of certain vesting conditions. The Administrator will establish the exercise price per share under each option, which will not be less than the fair market value (or 110% of the fair market value in the case of ISOs granted to individuals who own more than 10% of the outstanding shares of the Company’s common stock) of a share on the date the option is granted. The Administrator will establish the term of each option, which in no case may exceed a period of 10 years from the date of grant (or five years in the case of ISOs granted to individuals who own more than 10% of the outstanding shares of the Company’s common stock). Options granted under the Amended Plan may be either ISOs or options that are not intended to qualify as ISOs, nonqualified stock options (“NQSOs”). No ISOs may be granted after November 9, 2031.

Stock Appreciation Rights

A SAR provides the holder with the right to receive the monetary equivalent of the increase in value of a specified number of shares over a specified period of time after the right is granted. SARs may be granted to participants either in connection with an award of options (“tandem SARs”) or not in connection with an award of options (“freestanding SARs”). The holder of a tandem SAR is entitled to elect between the exercise of the underlying option for shares of common stock or the surrender of the option in exchange for the receipt of a cash payment equal to the excess of the fair market value on the surrender date over the aggregate exercise price payable for such shares. The holder of stand-alone SARs will be entitled to receive the excess of the fair market value (on the exercise date) over the exercise price for such shares. The Administrator will establish the terms and conditions of SARs, including vesting conditions. The Administrator will establish the exercise price per share under each stand-alone SAR, which will not be less than the fair market value of a share on the date the SAR is granted. The Administrator will also establish the term of each SAR, which in no case may exceed a period of 10 years from the date of grant.


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Other than in connection with a change in the Company’s capitalization, the Company cannot, without shareholder approval, reduce the exercise price of a stock option or SAR, and at any time when the exercise price of a stock option or SAR is above the market value of the Company’s common stock, the Company cannot, without shareholder approval, cancel and re-grant or exchange such stock option or SAR for cash, other awards, or a new stock option or SAR at a lower (or no) exercise price.

Restricted Stock and Restricted Stock Units

Restricted stock is an award or issuance of shares where the grant, issuance, retention, vesting, or transferability of such shares is subject during specified periods of time to such conditions and terms (including continued employment or certain performance conditions) as the Administrator deems appropriate. RSUs are awards denominated in units of shares under which the settlement of the award is subject to such conditions and terms (including continued employment or certain performance conditions) as the Administrator deems appropriate. RSUs may be settled in shares of common stock, cash, or a combination of the foregoing, as determined by the Administrator on the grant date. Restricted stock or RSUs (but no other awards under the Amended Plan) may include dividend or dividend equivalent rights, as may be specified by the Administrator in the award agreement; provided, however, that dividends or dividend equivalent rights will not be paid with respect to any shares underlying awards of restricted stock or RSUs (whether performance- or time-based), except to the extent that such shares are earned.

Performance Criteria

Awards, including restricted stock, RSUs, and options, may be subject to the attainment of performance goals relating to performance criteria selected by the Administrator. Performance goals for such awards may include one or more of the following business criteria (as selected and defined by the Administrator), referred herein as the “Performance Criteria”: (i) cash flow; (ii) earnings per share, as adjusted for any stock split, stock dividend, or other recapitalization; (iii) earnings measures; (iv) return on equity; (v) total shareholder return; (vi) share price performance, as adjusted for any stock split, stock dividend, or other recapitalization; (vii) return on capital; (viii) revenue; (ix) income; (x) operating or profit margin; (xi) return on operating revenue; (xii) brand recognition or acceptance; (xiii) customer satisfaction; (xiv) productivity; (xv) expense targets; (xvi) market share; (xvii) cost control measures; (xviii) inventory turns or cycle time; (xix) balance sheet metrics; (xx) strategic initiatives; (xxi) store count; (xxii) comparable store sales; or (xxiii) ESG goals; provided, however, that Performance Criteria shall include any derivations of these Performance Criteria (e.g., income shall include pre-tax income, net income, operating income, etc.). Any of these Performance Criteria may be used to measure the performance of the Company as a whole or any business unit or division of the Company. Performance Criteria may be stated in absolute terms or relative to comparison companies or indices to be achieved during a period of time.

The Administrator may provide, at the time it establishes Performance Criteria for any award (as well as at any time when the achievement of the Performance Criteria remains substantially uncertain), that any evaluation of performance shall include or exclude any one or more of

the following events that occurs during a performance period: (i) significant acquisitions or dispositions of businesses or assets by the Company, (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; (iv) any reorganization and restructuring programs; (v) the effect of items that are unusual in nature or occur infrequently as determined under generally accepted accounting principles; (vi) significant, non-recurring charges or credits; (vii) foreign exchange rates; and (viii) any such other events that are determined to be appropriate by the Administrator, which would result in objective and non-discretionary adjustments.

Method of Payment for Shares and Tax Withholding

The Administrator will determine the form of payment, if any, for any shares of common stock issued in exercise or settlement of an award under the Amended Plan, which may include cash, shares of common stock owned by the participant, withholding of shares of common stock otherwise issuable upon exercise or settlement, or a broker-assisted cashless exercise. Further, to the extent required by applicable federal, state, local, or foreign law, the Administrator may or a participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise. These obligations may be satisfied by having the Company withhold a portion of the shares that otherwise would be issued to a participant under such award or by tendering shares previously acquired by the participant in accordance with rules established by the Administrator. The fair market value of the shares to be withheld or tendered will be determined based on such methodology that the Company deems to be reasonable and in accordance with applicable law.

Termination of Service

Unless otherwise provided by the Administrator and except in the event of a change of control as described below, unvested awards granted under the Amended Plan will expire, terminate, or otherwise be forfeited immediately upon termination of a participant’s service for any reason (except that unvested options will accelerate in the event of a participant’s retirement or death), and vested awards granted under the Amended Plan will expire, terminate, or otherwise be forfeited as follows:

three months after a participant’s (other than with respect to a non-employee director) termination of service, including voluntary termination by the participant, other than in the circumstances described below, and 36 months after a non-employee director ceases to be a director, other than in connection with the director’s misconduct or death;
immediately upon termination of a participant’s service for misconduct;
12 months after the date on which a participant, other than a non-employee director, becomes disabled;
12 months after the death of a participant; and
36 months after the date a participant, other than a non-employee director, retires.

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Change of Control

Unless otherwise provided in an agreement between the participant and the Company, in the event of a change of control of the Company (as defined in the Amended Plan), subject to certain limitations and restrictions as more fully described in the Amended Plan:

options and SARs may become fully vested and immediately exercisable with any performance-based options and SARs for which the performance period has not yet been completed, vesting at the target level specified in the award agreement;
restriction periods and restrictions imposed on restricted stock and RSUs that are not performance-based may lapse;
any restriction periods and restrictions imposed on restricted stock and RSUs that are performance-based (and for which the performance period has not yet been completed) shall lapse, with such performance-based criteria deemed achieved at the target level specified in the applicable award agreement; and
restrictions and deferral limitations and other conditions applicable to other awards may lapse, and the awards may become free of restrictions, limitations, or conditions and become fully vested and transferable.

Generally, accelerated vesting or lapse of restrictions on awards held by a non-employee director will occur upon the occurrence of a change of control, and accelerated vesting or lapse of restrictions on awards held by a partner will occur (a) only if a partner’s employment is terminated without cause or due to a resignation for good reason within a year after a change of control or (b) upon the occurrence of a change of control if the acquiring company does not assume outstanding awards or substitute equivalent awards or if the transaction involves the sale, liquidation, or disposition of substantially all of the Company’s assets.

Transferability of Awards

Unless otherwise provided by the Administrator, awards granted under the Amended Plan may only be transferred by will or the laws of descent and distribution.

Shareholder Rights

Unless otherwise provided in an award agreement, until the issuance of the share certificate evidencing the shares underlying an award, participants will not have voting or dividend rights with respect to those shares.

No Right to Company Employment

Nothing in the Amended Plan or an award agreement will interfere with or limit in any way the right of the Company or its subsidiaries to terminate any participant’s employment or service with the Company or a subsidiary at any time or for any reason, with or without cause, nor will the Amended Plan or an award itself confer upon any participant any right to continue their employment or service for any specified period of time.

Compliance with Law

The issuance and delivery of shares pursuant to an award under the Amended Plan will be subject to all relevant provisions of law, including, without limitation, the federal securities laws, the rules and regulations promulgated under such laws, and the requirements of any stock exchange or quotation system upon which the common stock may then be listed or quoted, and will be further subject to the approval of counsel for the Company with respect to such compliance.

Other Policies

Awards granted under the Amended Plan may be subject to the terms and conditions of any other policy (and any amendments thereto) adopted by the Company, which may include any policy related to the vesting or transfer of equity awards. Whether any such policy will apply to a particular award may depend, among other things, on when the award was granted, whom the award was granted to, and the type of award.

Amendment and Termination

The Amended Plan was adopted by the Board on November 9, 2021, subject to shareholder approval of the Amended Plan. The Administrator may amend or terminate the Amended Plan as the Administrator determines to be advisable. Shareholder approval may be required for certain amendments, in accordance with applicable legal, regulatory, and stock exchange listing requirements. The Administrator has specific authority to amend the Amended Plan without shareholder approval in order to comply with legal, regulatory, and stock exchange listing requirements and to avoid unanticipated consequences determined to be inconsistent with the purpose of the Amended Plan or any award agreement. No amendment or termination of the Amended Plan may be made that would impair the rights of the holder of an award without such holder’s consent.

Federal Income Tax Treatment

The following tax discussion is a general summary as of the date of this proxy statement of the U.S. federal income tax consequences to the Company and the participants in the Amended Plan. The discussion is intended solely for general information purposes and does not make specific representations to any participant. The discussion does not address state, local, or foreign income tax rules or other U.S. tax provisions, such as estate or gift taxes. A recipient’s particular situation may be such that some variation of the basic rules is applicable to them. In addition, the federal income tax laws and regulations frequently have been revised and may be changed again at any time. Therefore, each recipient is urged to consult a tax advisor before exercising any award or before disposing of any shares acquired under the Amended Plan both with respect to federal income tax consequences as well as any state, local, or foreign tax consequences.


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PROPOSAL 2 – APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

Stock Options

ISOs and NQSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Section 422 of the Code. NQSOs are not intended to comply with such requirements.

A participant is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If a participant holds the shares acquired upon exercise of an ISO until the later of two years following the option grant date and one year following exercise, the participant’s gain, if any, upon a subsequent disposition of such shares is long-term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the participant’s basis in the shares (which generally equals the exercise price). If a participant disposes of stock acquired pursuant to exercise of an ISO before satisfying these holding periods, the participant will recognize ordinary income in the year of disposition in an amount equal to the excess of the fair market value of the shares at the time of exercise (or, if less, the amount realized on the disposition of the shares), over the exercise price paid for the shares, and capital gain or loss for any other difference between the sale price and the exercise price. The Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the participant’s disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company will be entitled to a deduction in the year the participant disposes of the shares in an amount equal to the ordinary income recognized by the participant.

In order for an option to qualify for ISO tax treatment, the grant of the option must satisfy various other conditions more fully described in the Code. The Company does not guarantee that any option will qualify for ISO tax treatment even if the option is intended to qualify for such treatment. In the event an option intended to be an ISO fails to so qualify, it will be taxed as a NQSO described below.

A participant is not taxed on the grant of a NQSO. On exercise, the participant recognizes ordinary income equal to the difference between the exercise price and the fair market value of the shares acquired on the date of exercise. The Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the participant as ordinary income. The participant’s gain (or loss) on subsequent disposition of the shares is long-term capital gain (or loss) if the shares are held for at least one year following exercise, and otherwise is short-term capital gain (or loss). The measure of the gain (or loss) on disposition is the difference between the proceeds received on disposition and the participant’s basis in the shares (which generally equals the stock price on the exercise date). The Company does not receive a deduction for any such capital gain.

Stock Appreciation Rights

Generally, the holder of a freestanding SAR will not recognize any taxable income at the time the freestanding SAR is granted. If the freestanding SAR is settled in cash, the cash will be taxable as ordinary income to the holder at the time that it is received. If the freestanding SAR is settled in shares, the holder will recognize ordinary income equal to the excess of the fair market value of the shares on the day they are received over any amounts paid by the holder for the shares.

With respect to tandem SARs, if a holder elects to surrender the underlying option in exchange for cash or stock equal to the appreciation inherent in the underlying option, the tax consequences to the holder will be the same as discussed above relating to freestanding SARs. If the holder elects to exercise the underlying option, the holder will be taxed at the time of exercise as if they had exercised a NQSO (discussed above).

The Company will be entitled to a deduction equal to the amount of ordinary income that the holder is required to recognize as a result of the exercise of a SAR.

Restricted Stock and Restricted Stock Units

Grantees of restricted stock or RSUs generally do not recognize income at the time of grant. When the award vests or is paid, grantees generally recognize ordinary income in an amount equal to the fair market value of the stock or units at such time, and the Company will receive a corresponding deduction. However, no later than 30 days after a participant receives an award of restricted stock, pursuant to Section 83(b) of the Code, the participant may elect to recognize taxable ordinary income in an amount equal to the fair market value of the shares at the time of receipt. Provided that the election is made in a timely manner, when the restrictions on the shares lapse, the participant will not recognize any additional income. If the participant forfeits the shares to the Company (e.g., upon the participant’s termination prior to vesting), the participant may not claim a deduction with respect to the income recognized as a result of the election. Dividends (if any) paid with respect to unvested shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are received.

Company Deduction and Section 162(m)

The Company generally will be entitled to a tax deduction in connection with the vesting, settlement, or exercise of an award under the Amended Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income. However, Section 162(m) of the Code places a limit of $1 million on the amount of compensation that we may deduct as a business expense in any year with respect to certain of our most highly paid executive officers. While the Compensation Committee considers the deductibility of compensation as one factor in determining executive compensation, the Compensation Committee retains the discretion to award and pay compensation that is not deductible as it believes that it is in the best interests of our shareholders to maintain flexibility in our approach to executive compensation and to structure a program that we consider to be the most effective in attracting, motivating, and retaining key employees.

New Plan Benefits

The Amended Plan does not provide for set benefits or amounts of awards and we have not approved any awards that are conditioned on shareholder approval of the Amended Plan. However, as discussed in further detail in the section entitled “Compensation of Directors,” each of our current non-employee directors is entitled to receive certain grants of fully vested RSUs or options in connection with their service on the Board, pursuant to the terms of our non-employee director compensation program, which will be granted under the Amended Plan if the plan is approved. The following table summarizes the aggregate value of the shares that our current non-employee directors as a group will receive if they remain a director following the 2022 Annual Meeting and highlights the fact that none of our executive officers (including our named executive officers) or employees will receive any set benefits or awards that are conditioned upon shareholder approval of the Amended Plan. All other future awards are discretionary and cannot be determined at this time.


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PROPOSAL 2 – APPROVAL OF AMENDMENT AND RESTATEMENT OF 2005 LONG-TERM EQUITY INCENTIVE PLAN

Name and Position        Dollar Value             Number of Units
Kevin R. Johnson      
Rachel Ruggeri      
John Culver      
Michael Conway      
Rachel A. Gonzalez      
Patrick J. Grismer      
Rosalind G. Brewer      
All current executive officers as a group(1)      
All non-employee directors as a group(2)   $ 3,200,000  (3)   
All partners as a group (excluding executive officers)      
(1) Consists of Michael Conway, John Culver, Rachel A. Gonzalez, Kevin R. Johnson, Angela Lis, Rachel Ruggeri, and Gina Woods
(2) The number of shares subject to each non-employee director’s RSUs and option awards will not be determinable until the grant date. See the section entitled Compensation of Directors on page 42 for more information.
(3) Amount reflects non-employee director elections to receive RSUs in lieu of $130,000 annual cash retainer as well as standard annual equity award of $165,000.

Existing Plan Benefits

The following table sets forth information with respect to awards previously granted under the Equity Plan as of January 2, 2022:

Name and Position(1)       Number of Shares
Covered by Awards
Kevin R. Johnson   3,190,696
Rachel Ruggeri   251,517
John Culver   2,792,652
Michael Conway   836,631
Rachel A. Gonzalez   374,126
Patrick J. Grismer   222,723
Rosalind G. Brewer   665,789
All current executive officers as a group(2)   7,812,740
All non-employee directors as a group(3)   1,568,635
All partners as a group (excluding executive officers)   416,497,833
(1) No awards have been granted under the Equity Plan to any associate of any of our directors (including nominees) or executive officers and no person received 5% or more of the total awards granted under the Equity Plan since its inception.
(2) Consists of Michael Conway, John Culver, Rachel A. Gonzalez, Kevin R. Johnson, Angela Lis, Rachel Ruggeri, and Gina Woods.
(3) All the non-employee directors who are nominees for election as a director are included within this group. The total number of shares that they were granted on an individual basis are as follows: Richard E. Allison Jr., 9,894; Andrew Campion, 9,894; Mary N. Dillon, 49,803; Mellody Hobson, 591,655; Jørgen Vig Knudstrop, 55,611; Isabel Ge Mahe, 9,894; Satya Nadella, 23,539; Joshua Cooper Ramo, 111,794; Clara Shih, 58,285; and Javier G. Teruel, 648,266.

Additional Information Regarding our Equity Compensation Plans

Please also refer to the section entitled “Stock Ownership - Equity Compensation Plan Information” for further information about the total number of shares subject to outstanding stock options and rights and the total number of shares available for issuance under all of our equity compensation plans as of October 3, 2021, including the Equity Plan and the 1995 Employee Stock Purchase Plan.

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PROPOSAL 3
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

We are asking shareholders to approve, on a nonbinding, advisory basis, the compensation paid to our named executive officers as reported in this proxy statement (commonly referred to as a “say-on-pay”).

We encourage shareholders to read the Compensation Discussion and Analysis section of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the board of directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to the Company’s long-term success.

The board has adopted a policy providing for an annual say-on-pay advisory vote. In accordance with this policy and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as a matter of good corporate governance, we are asking shareholders to approve, on a nonbinding, advisory basis, the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of Starbucks Corporation approve, on a nonbinding, advisory basis, the compensation of the Company’s named executive officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables, notes, and narrative in the proxy statement for the Company’s 2022 Annual Meeting of Shareholders.

This advisory say-on-pay resolution is non-binding on the board of directors. Although non-binding, the board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. Unless the board modifies its policy on the frequency of future say-on-pay advisory votes, the next say-on-pay advisory vote will be held at the 2023 Annual Meeting of Shareholders.

Board Recommendation
The board of directors recommends a vote FOR approval, on a nonbinding, advisory basis, of the compensation paid to our named executive officers.

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Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides information on the goals and objectives of our executive compensation program including Starbucks global compensation philosophy, which focuses on rewarding partners for their central role in our growth. While the principles underlying this philosophy extend to all levels of the organization, this CD&A primarily covers the compensation provided to our named executive officers (“NEOs”). For 2021, our NEOs include five current executive officers and two former executive officers named below and in the executive compensation tables of this proxy statement. We use “Compensation Committee” or “Committee” in the CD&A and the executive compensation tables to refer to the Compensation and Management Development Committee of the Starbucks board of directors. We refer to all of our employees as “partners”, including throughout this proxy statement, to reflect the significant role they play in our success.

       
Kevin R. Johnson       Rachel Ruggeri       John Culver       Michael Conway       Rachel A. Gonzalez
president and chief
executive officer
  executive vice president
and chief financial officer
  group president,
North America and
chief operating officer
  group president,
International and Channel
Development
  executive vice president,
general counsel
 
Patrick J. Grismer*       Rosalind G. Brewer**
former executive
vice president,
chief financial officer
  former group president,
Americas and
chief operating officer
   
* Mr. Grismer retired as executive vice president, chief financial officer of the Company effective February 1, 2021, and remained employed with the Company in a senior advisor role through May 2, 2021.
   
**    Ms. Brewer resigned from employment with the Company, effective February 26, 2021, to become the chief executive officer of another publicly traded company.

EXECUTIVE SUMMARY

Business Highlights

Starbucks financial results for fiscal 2021 demonstrate the overall strength and resilience of our brand and the impact and opportunity afforded by the authentic connection and the deep trust and loyalty we have built with customers around the world. Despite increased costs and unprecedented operating challenges resulting from the global COVID-19 pandemic, such as global supply chain limitations and store closures or restrictions on operating hours due to public health protocols we experienced significant improvements in our financial results compared to fiscal 2020. We have resumed our share repurchase program in the first quarter of fiscal 2022, committing to returning $20 billion to our shareholders through share repurchases and the payment of dividends over the next three years. Our stock price also increased 31% fiscal year over year from $86.07 to $112.92.

Our results underscore the passion and dedication of our over 400,000 Starbucks green apron partners, who serve nearly 100 million customer occasions around the world every week. In addition, our results demonstrate the success of the investments we have already made, and will continue to make ahead of the growth curve, in our people, digital, beverage and food innovation, and store experiences. Our investments in fiscal 2021 included providing our partners with financial support and economic certainty during the ongoing COVID-19 pandemic; avoiding layoffs while most of our stores were temporarily closed; and accelerating our store portfolio transition through our North America Trade Area Transformation, repositioning over 500 stores in the U.S. to optimal locations with favorable economics. Building on these investments, in October 2021, we committed to bringing the average U.S. retail hourly wage to nearly $17/hour by summer 2022. We believe these investments are driving and strengthening our global business and establishing the foundation for even greater success in the future.

Executive Compensation

In response to the results of our 2021 say-on-pay advisory vote, we contacted shareholders collectively representing more than half of our outstanding shares to offer to discuss their perspectives on our executive compensation programs, and shareholders representing over 25% of our outstanding shares accepted our offer to engage. Informed by these discussions, and in consideration of the feedback that we received from our shareholders, we made certain decisions regarding our incentive award grant practices going forward and also made meaningful enhancements to this 2021 CD&A, enhancing our disclosure with increased detail and transparency related to the individual performance factor in our 2021 annual incentive awards.

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EXECUTIVE COMPENSATION

The year over year improvements in our business in fiscal 2021 demonstrate the resilience of our business model
and the relevance of the Starbucks brand.
 
         
Total Consolidated Revenues grew
21% year-over-year to

$29.1 Billion

      Total Consolidated EPS grew
348% year-over-year to

$3.54*

     
Capital Returned to Shareholders in
Fiscal 2021

$2.1 Billion

  Total Consolidated non-GAAP EPS
grew 177% year-over-year to

$3.24**

  Stock Price grew 31%
year-over-year to

$112.92

         
   
* Includes a $0.56 gain on the divestiture of our South Korea joint venture and $0.10 related to the 53rd week in fiscal 2021.
**    Includes $0.10 related to the 53rd week in fiscal 2021. Appendix A includes a reconciliation of non-GAAP EPS to diluted net earnings per share (“EPS”), the most directly comparable measure reported under accounting principles generally accepted in the United States (“GAAP”).

Executive Compensation Objectives and Program Design

A key element of our success is having the right leaders to guide Starbucks and successfully execute our strategy, and it is critical to attract and retain the highest level of executive talent. Further, our executive compensation program is structured to closely align with our business purpose and commitment to shareholder value creation, focusing on long-term sustainable growth, and increasing shareholder returns while staying true to our core principles. We believe our compensation structure and its resulting realizable pay for executives demonstrates our strong commitment to linking compensation to Company performance and strategy.

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EXECUTIVE COMPENSATION

Say-on-Pay Advisory Vote - 2021 Shareholder Outreach

Every year, Starbucks provides shareholders with the opportunity for an annual vote to approve its executive compensation program on an advisory basis. At our 2021 Annual Meeting of Shareholders, approximately 47.5% of our shareholders supported our advisory vote on executive compensation. As a result, our 2021 say-on-pay advisory proposal did not pass. Following this vote, we conducted an extensive engagement campaign with our shareholders, which we describe in detail below.

We Contacted Shareholders Representing 53% of our Total Shares Outstanding

Shareholders We Contacted

We reached out to 99 shareholders representing 53% of our total shares outstanding to invite them to participate in calls to discuss our executive compensation programs
19 shareholders representing over 25% of our total shares outstanding accepted our invitation to share feedback

Starbucks Participants

Mary N. Dillon, our independent chair of the Compensation Committee, participated in meetings with investors representing 17% of our total shares outstanding
Starbucks partners from our legal, investor relations, and executive compensation teams participated in all of the shareholder meetings

Key Themes from Shareholder Engagement

While our shareholders were generally pleased with the design of our executive compensation program, and in particular, with the incorporation of ESG metrics into our short-term and long-term incentive programs, they did express concern with the granting of special awards to our ceo and our former coo outside of our annual compensation program, as well as our practice of granting of multi-year performance awards that will be settled in cash, and wanted to see enhanced disclosure around the achievement of the 2021 annual incentive awards in light of the increase in the weighting of the individual performance factor from 30% to 50%. Our Compensation Committee is committed to implementing compensation programs that are aligned with the interests of our shareholders and confirms that it does not intend to make future awards to our continuing executive officers outside of our ongoing annual incentive programs (except in connection with new hires and promotions) or grant future multi-year performance awards in the form of cash. We have also enhanced disclosure around the achievement of the 2021 annual incentive awards.

What We Heard   What We Did
Topic   Feedback   Changes for Fiscal 2022 and Beyond
Special
Awards to
ceo
      Shareholders expressed a concern with the granting of special awards to our ceo and our former coo outside of our annual compensation program; shareholders also noted the grant of special awards in consecutive years      

  In response to shareholder feedback, the Compensation Committee confirms that it does not intend to make future awards to our continuing executive officers outside of our ongoing annual incentive programs except in connection with new hires and promotions

  The Compensation Committee also confirms that it does not intend to grant future long-term performance awards in the form of cash; all future long-term performance awards will be settled in shares of Starbucks common stock

  We enhanced disclosure around the achievement of the 2021 annual incentive awards and clarified that 60% of the target amount is tied to company financial or operational goals, 10% is tied to the company’s ESG goals, and 30% is tied to individual performance goals

  The Compensation Committee did not significantly revise the design of our executive compensation program for fiscal 2022 based on our compensation philosophy and the focused feedback we received; however, the Committee clarified the importance of the individual performance factor and the rigor applied by the Committee, noting that the individual performance factor will only include goals specific to each individual participant or whose achievement will vary by participant

Multi-Year
Performance
Cash Awards
  Despite a relative total shareholder return (“TSR”) metric, shareholders expressed a concern with the granting of multi-year performance awards that will be settled in cash, such as the December 2019 long-term cash performance-based award to our ceo and our former coo, noting the potential for a lack of alignment with shareholder value  
Short-Term
Incentive
Awards
  Shareholders are seeking enhanced disclosure around the goals and ultimate achievement of the 2021 annual incentive awards; comprehensive disclosure is a focus of investors due to the increased weighting of the individual performance factor from 30% to 50%  
Design of
Program
Generally
  Shareholders were otherwise generally pleased with the overall design and framework of our executive compensation program, and in particular, with the incorporation of ESG metrics, including inclusion and diversity metrics, into our short-term and long-term incentive programs  

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CEO Compensation and Performance Alignment

The Compensation Committee takes seriously its responsibility to maintain appropriate pay for performance alignment with an emphasis on shareholder value. From the end of fiscal 2020 through the end of fiscal 2021, our stock price increased in value by 31%. However, as of the end of fiscal 2021, the realizable value of compensation awarded in fiscal 2020 was only 68% of target primarily due to the realizable value attributable to the one-time long-term cash performance-based award granted to our ceo in fiscal 2020 being equal to only 30% percent of target, as described in more detail below. Further, the realizable value of compensation awarded in fiscal 2021 was 120% of target, which reflects, among other things, the alignment of our fiscal 2021 performance goals with our actual performance.

($ in millions)   FY20
Target
  FY20
Realizable
  FY21
Target
  FY21
Realizable
Base Salary       $1.6          $1.5          $1.6          $1.6  
Non-Equity Incentive Plan Compensation   $3.1     $1.9     $3.1     $4.0  
Time-based RSUs   $5.4     $7.2     $5.8     $7.0  
Performance-based RSUs   $8.1     $11.2     $8.7     $10.5  
Performance Cash   $25.0     $7.5     $0.0     $0.0  
    $43.2     $29.3     $19.2     $23.2  


“Target Pay” for each fiscal year is the sum of

  the salary rate for that year, pro-rated accordingly based on the effective date of any increase,
  the target annual incentive, and
  the grant date fair value of long-term incentives.

“Realizable Pay” for each fiscal year is the sum of

  the salary earned for that year,
  the annual incentive earned for that year,
  the value of time-based restricted stock units (“RSUs”) granted in that fiscal year, which for vested RSUs is equal to the stock price on the applicable vesting dates multiplied by the number of vested RSUs, and for unvested RSUs is valued based on our closing stock price on October 1, 2021, the last trading day of our 2021 fiscal year multiplied by the number of unvested RSUs,
  the value of performance-based restricted stock units (“PRSUs”) granted in that fiscal year, which for:
          unvested PRSUs for which the performance targets have been set are valued based on the number of shares that would have been earned based on actual results through October 3, 2021, multiplied by our closing stock price on October 1, 2021, and
      unvested PRSUs for which the performance targets have not been set are valued based on the number of target shares multiplied by our closing stock price on October 1, 2021, and
  the value of any performance cash award granted in that fiscal year, based on the amount that would have been earned based on actual results through October 3, 2021, and our closing stock price on October 1, 2021.

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Long-Term Cash Performance-Based Award

In December 2019, the board desired to recognize and retain Mr. Johnson’s high-caliber leadership and awarded him a long-term cash performance-based award that reflects the board’s commitment to furthering the Company’s leadership continuity. The award is designed to retain Mr. Johnson in his role as president and ceo by providing compelling upside reward opportunity beyond the Company’s regular executive compensation program for continuing to achieve exceptional shareholder returns through our transformational “Growth at Scale” agenda. The award had a target value of $25 million but a payout under the award can only be earned if our relative TSR performance meaningfully outperforms the S&P 500. Specifically, the award will be paid out at 100% of target if the Company’s TSR performance relative to the companies comprising the S&P 500 index is at the 65th percentile, zero if performance is at the 40th percentile, and 200% of target if performance is at the 80th percentile, with linear interpolation between these points. The performance period will be measured from October 1, 2019, to September 30, 2022. The award is capped at target payout if Starbucks absolute TSR is negative over the three-year performance period, regardless of relative performance. At the end of fiscal 2021, Starbucks relative TSR was tracking at the 47th percentile, which would result in a payout of approximately 30% of target or $7.5 million. There has been no payment made to Mr. Johnson under the award. The ultimate payout of the award will be determined at the conclusion of the performance period.

Fiscal 2021 Target Compensation

The vast majority of compensation value we deliver to our executives is in the form of compensation that is variable or “at-risk” based on our performance or the value of our stock price. The at-risk elements of our fiscal 2021 program include (i) our Annual Incentive Bonus Plan, a cash annual incentive bonus, and (ii) our Leadership Stock Plan, through which RSUs and PRSUs were granted as long-term incentive awards.

CEO
Compensation
Mix
    
     
Other NEOs*
Compensation
Mix
 
   
*     Excludes Ms. Brewer and Mr. Grismer who ceased employment with the Company in February 2021 and May 2021, respectively.

As further described herein, Ms. Ruggeri, Mr. Culver, and Mr. Conway each received promotions and related compensation increases during fiscal 2021. The above reflects the fiscal 2021 base salary and target annual incentive opportunity for each of Ms. Ruggeri, Mr. Culver, and Mr. Conway, prorated and weighted based on the amount of time in each role before and after their respective promotions.

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Rigorous Goal Setting

Starbucks is performance driven, and the Committee believes there is a strong connection between our impressive track record and the corresponding goals that we set for ourselves under our incentive plans. Our management and the Committee worked collaboratively to set targets reflective of our ambitious performance goals and to drive long-term value creation for our shareholders.

Annual Incentive Bonus Plan   Leadership Stock Plan
     
     

Annual Incentive Bonus Plan

We set our fiscal 2021 performance target above our fiscal 2020 performance consistent with our challenging strategic growth plans and our rigorous goal setting philosophy. 50% of the overall Annual Incentive Bonus Plan payout is based on adjusted net revenue and adjusted operating income goals, which are weighted 40% and 60%, respectively. The remaining 50% of the overall Annual Incentive Bonus Plan payout for fiscal 2021 is based on what we call the “individual performance factor” or “IPF”, which is intended to hold senior leaders individually accountable for our people-positive, planet-postive, and profit-positive goals and initiatives as well as goals tied to our Mission and Values and specific strategic and operational priorities. Our planet-positive and profit-positive goals are applied consistently across the executive officer team, with Mr. Culver and Mr. Conway also having additional international profit goals.

The individual performance factor is comprised of:

Objective company profit-positive goals, including comparable store sales, net new stores, and operating margin, which align with our long-term strategy for the business and on which we regularly report publicly to our shareholders and which are applied consistently across our named executive officers (20% weighting);
   
People-positive goals whose achievement will vary by participant, and include inclusion and diversity goals (20% weighting);
   
Planet-positive environmental goals, which align with our long-term environmental goals (20% weighting); and
   
Goals specific to each individual participant related to our Mission and Values and strategic and operational goals (40% weighting).

The Annual Incentive Bonus Plan and the results of our fiscal 2021 performance are described in detail starting on page 62.

Leadership Stock Plan

For fiscal 2021, long-term incentives were awarded in the form of: (1) PRSUs, where the number of shares earned is based on three-year EPS performance against pre-established annual targets, subject to a downward or upward adjustment of 25% based on relative TSR performance and an additional downward or upward adjustment of up to 10% based on achievement of inclusion and diversity goals and (2) time-based RSUs. The Leadership Stock Plan and the results of our fiscal 2021 performance are described in detail starting on page 72.

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Compensation Policy Highlights

 

   
WHAT WE DO
       Pay-for-Performance Philosophy with Large Majority of Pay at Risk
Combination of Absolute and Relative Performance Metrics in Incentive Programs
Incorporate ESG Goals into our Long-term and Short-term Incentive Plans (including Inclusion and Diversity Goals)
Stock Ownership Policy, including Rigorous Share Ownership Requirements
Double-Trigger Equity Acceleration Upon a Change in Control
Independent Executive Compensation Consultant
Annual Assessment of Risk and Risk Mitigation Practices
Regular Review of Share Utilization, Dilution, and Cost
Robust Engagement with Shareholders on Governance and Compensation
Clawback Policy that Covers Cash and Equity and is Beyond What is Required by the Sarbanes-Oxley Act of 2002

 

   
WHAT WE DON’T DO
      No Excise Tax Gross-Ups Upon a Change in Control
No Excessive Executive Perquisites
No Tax Gross-Ups on Perquisites or Benefits
No Repricing or Cash-out of Underwater Stock Options Without Shareholder Approval
No Stock Option Grants Below 100% of Fair Market Value
No Fixed Term or Evergreen Employment Agreements; No Severance Agreements
No Hedging, Pledging, Short Sales, or Derivative Transactions in Company Stock
No Change-in-Control Agreements with Executives; Same Change in Control Equity Award Benefits as All Employees
No Executive Pension Plans or Supplemental Executive Retirement Plans


RECENT CHANGES TO OUR EQUITY INCENTIVE PLAN TO REFLECT OUR COMMITMENT TO GOVERNANCE

Subject to shareholder approval, we recently amended our 2005 Long-Term Equity Incentive Plan (the “Equity Plan”), pursuant to which we make grants to all our partners, including our senior leaders, to:

Provide for One Year Minimum Vesting on All Equity Awards: Consistent with best practices and to reflect our current practice of generally requiring partners to have been employed for one year from their grant date before their equity awards vest; 95% of all awards granted after our Equity Plan is amended and restated will have a minimum vesting period of one year from the date of grant.
   
Clarify that Dividends and Dividend Equivalents will not be Paid on Unvested Awards: Consistent with our pay-for-performance philosophy and current practice, we clarified that no dividends or dividend equivalents may be paid on any unvested restricted stock or stock unit awards, and no dividend equivalents or otherwise will be granted with respect to stock options and stock appreciation rights (“SARs”), whether vested or unvested
   
Limit Payout of Performance-based Options and SARs: To ensure fair but not excessive compensation in the event of a change in control, we clarified that the settlement of performance-based options and SARs in the event of a change in control will be limited to target achievement.

Please see Proposal 2 — Approval of Amendment and Restatement of 2005 Long-term Equity Incentive Plan beginning on page 44 for more information.

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2021 EXECUTIVE COMPENSATION

Fiscal 2021 Executive Compensation Overview

The following table provides information regarding the elements of our fiscal 2021 executive compensation program.

Element       Form       Objectives and Basis
Base Salary   Cash   Attract and retain highly qualified executives to drive our success
Annual Incentive Bonus   Cash   Drive short-term Company performance and promote our people-, planet-, and profit-positive initiatives
        Actual payout based on financial performance against preestablished net revenue and operating income targets and an individual performance factor, comprising of company and individual performance goals
           
Long-term Incentive   PRSUs and time-based RSUs   Drive long-term Company performance, align interests of executives with those of shareholders, promote our people- positive initiatives, retain executives through long-term vesting, and provide potential wealth accumulation
        Delivered 60% in PRSUs and 40% in time-based RSUs
        PRSUs are earned based on three-year EPS performance against pre-established annual targets, subject to downward or upward adjustment of 25% based on relative TSR and downward or upward adjustment of up to 10% based on achievement of inclusion and diversity goals; shares are only able to vest after the full three-year performance period
        RSUs vest over a four-year period, subject to continued service with the Company, and become more valuable as our stock price increases, which benefits all shareholders
Perquisites and Other Executive Benefits   Limited enhanced benefits (See “Other Compensation Policies - Perquisites and Other Executive Benefits”)   Provide for the safety and wellness of our executives and support our objective of attracting and retaining top executive talent
Deferred Compensation   401(k) plan and non-qualified Management Deferred Compensation Plan   Provide methods for general savings, including for retirement and benefits generally consistent with our peer group
General Benefits   Health and welfare plans, stock purchase plan, and other broad-based partner benefits   Offer competitive benefits package that generally includes benefits offered to all partners

 

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Financial Results Under Performance Goals

In determining the design of our fiscal 2021 Annual Incentive Bonus Plan and the PRSUs granted under the Leadership Stock Plan, we considered prior year incentive plan targets and results as well as the performance of our stock to date, with the targets for fiscal 2021 established significantly above the prior year’s results.

 

CONSOLIDATED ADJUSTED NET REVENUE(1)       CONSOLIDATED ADJUSTED OPERATING INCOME(2)
(IN MILLIONS)   (IN MILLIONS)
     
 
     
     
ADJUSTED EARNINGS PER SHARE(3)   TOTAL SHAREHOLDER RETURN
     
     
(1) Adjusted net revenue is a non-GAAP measure. The fiscal 2021 consolidated adjusted net revenue result excludes foreign currency fluctuations and the impact of the 53rd week. The fiscal 2020 consolidated adjusted net revenue result excludes foreign currency fluctuations, Channel Development transition impacts, accounting changes, and other items. The fiscal 2019 consolidated adjusted net revenue result excludes foreign currency fluctuations, ownership changes related to France, the Netherlands, and Thailand, accounting changes, and other items.
(2) Adjusted operating income is a non-GAAP measure. The fiscal 2021 consolidated adjusted operating income result excludes foreign currency fluctuations and the impact of the 53rd week. The fiscal 2020 consolidated adjusted operating income result excludes foreign currency fluctuations, Channel Development transition impacts, accounting changes, and other items. The fiscal 2019 consolidated adjusted operating income result excludes foreign currency fluctuations, ownership changes related to France, the Netherlands, and Thailand, accounting changes, and other items.
(3) Adjusted earnings per share is a non-GAAP measure. The fiscal 2021 adjusted earnings per share result excludes foreign currency fluctuations, effects of tax law changes, and the 53rd week. The fiscal 2020 adjusted earnings per share result excludes foreign currency fluctuations and the Channel Development transition impact. The fiscal 2019 adjusted earnings per share result excludes the impact of foreign currency fluctuations, restructuring of U.S. and Canada, ownership changes in Brazil, the Netherlands, France, and Thailand, the Global Coffee Alliance with Nestlé, the net impact of U.S. federal tax reform, unbudgeted share repurchases, and other items.

 

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Elements of Fiscal 2021 Executive Compensation

Base Salary

The Compensation Committee generally reviews and approves base salaries annually at its November meeting with new salaries effective in late November or early December of the same year, and makes periodic adjustments in connection with promotions, changes in roles and/or responsibilities, or to reward individual performance and promote market competitiveness. In making any such adjustments, the Compensation Committee will also consider the breadth, scope, and complexity of the NEO’s role, internal equity, and whether their base salary is appropriately positioned relative to similarly situated executives in our peer group. For fiscal 2021, the Committee reviewed and approved the base salaries shown below (and with respect to Mr. Johnson in his role as our president and ceo, the Committee recommended, and the independent directors approved, his base salary). In fiscal 2021, there were no merit-based increases for any of the NEOs and salary was adjusted only for those NEOs who were promoted.

  Base Salary
(Annualized Rate)
Named Executive Officer   Fiscal 2021       Fiscal 2020         % Change
Kevin R. Johnson   $ 1,550,000     $ 1,550,000       0 %
Rachel Ruggeri*   $ 800,000     $ 500,000       60 %
John Culver*   $ 1,000,000     $ 925,000       8 %
Michael Conway*   $ 925,000     $ 650,000       42 %
Rachel A. Gonzalez   $ 725,000     $ 725,000       0 %
Patrick J. Grismer   $ 900,000     $ 900,000       0 %
Rosalind G. Brewer   $ 1,071,200     $ 1,071,200       0 %

Ms. Ruggeri’s base salary was increased to $800,000 effective February 1, 2021, in connection with her promotion to executive vice president and chief financial officer. Mr. Culver’s salary was increased to $1,000,000 effective June 28, 2021, in connection with his promotion to group president, North America and chief operating officer. Mr. Conway’s salary was increased to $925,000 effective June 28, 2021, in connection with his promotion to group president, International and Channel Development, in each case, after considering the factors set forth above.

Annual Incentive Bonus Plan

Starbucks annual incentive bonuses for NEOs are paid pursuant to our Annual Incentive Bonus Plan. The Annual Incentive Bonus Plan is designed to ensure that awards are differentiated on the basis of individual performance and aligns compensation with the execution of long-term strategic initiatives. 50% of the overall Annual Incentive Bonus Plan payout is based on adjusted net revenue and adjusted operating income goals, which are weighted 40% and 60%, respectively, with a payout between 0-200% of target. The remaining 50% of the overall Annual Incentive Bonus Plan payout is based on an IPF with a payout between 0-200% of target for each component. As described in detail starting on the next page, the IPF is comprised of people-positive goals for which achievement will vary by participant and include inclusion and diversity goals (20% weighting); planet-positive environmental goals (20% weighting); company profit-positive goals (20% weighting); and goals which are specific to each individual participant related to our Mission and Values and strategic and operational goals (40% weighting).

 

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The graphic below illustrates the weighting of the performance goals and the calculation of the financial performance goals and individual performance factor components of the annual incentive bonuses.

                      INDIVIDUAL PERFORMANCE FACTOR
FY21
Design
  BASE ($) TARGET ANNUAL INCENTIVE
OPPORTUNITY (%)
NET REVENUE
(weighted 40%)
OPERATING
INCOME
(weighted 60%)
    People Positive   (weighted 20%)
  Planet Positive   (weighted 20%)
    Profit Positive   (weighted 20%)
            (weighted 50%)   Living our Mission and Values/
Helping Others Succeed/
Strategic and Operational Goals
  (weighted 40%)
                      (weighted 50%)

Target Opportunities

The target opportunities as a percentage of base salary for fiscal 2021 for our NEOs are shown below. Such target opportunities were determined by the Compensation Committee after considering a number of factors, including the executive’s role and responsibilities, whether the target annual incentive is competitive with similarly situated executives in our peer group, and our recent and projected financial performance.

    Bonus Targets
Percentage of Base Salary
Named Executive Officer       Fiscal 2021       Fiscal 2020       % Change
Kevin R. Johnson     200 %     200 %     0 %
Rachel Ruggeri*     120 %     100 %     20 %
John Culver     150 %     150 %     0 %
Michael Conway**     150 %     100 %     50 %
Rachel A. Gonzalez     100 %     100 %     0 %
Patrick J. Grismer***     125 %     125 %     0 %
Rosalind G. Brewer***     150 %     150 %     0 %

* Ms. Ruggeri’s target bonus opportunity was increased from 100% to 120% of base salary effective February 1, 2021, in connection with her promotion to executive vice president and chief financial officer.

** Mr. Conway’s target bonus opportunity was increased from 100% to 150% of base salary effective June 28, 2021, in connection with his promotion to group president, International and Channel Development.

*** Mr. Grismer received a prorated target bonus payout for fiscal 2021 in connection with his retirement, and following her departure, Ms. Brewer was not eligible to receive payouts under the Annual Incentive Bonus Plan.

The total annual incentive bonus delivered to each NEO for fiscal 2021 was determined based on both the extent to which the financial performance goals and IPF were achieved as considered by the Committee. The possible payouts for each NEO based on achievement of threshold, target, and maximum performance levels are disclosed in the Fiscal 2021 Grants of Plan-Based Awards Table on page 81. Mr. Grismer retired and Ms. Brewer ceased employment with the Company in May 2021 and February 2021, respectively. Mr. Grismer received a prorated target bonus payout for fiscal 2021 in consideration of his efforts to ensure an orderly transition with respect to the duties of the chief financial officer role, and to provide additional strategic planning support as a special advisor to Mr. Johnson through his retirement, and Ms. Brewer was not eligible to receive payouts under the Annual Incentive Bonus Plan.

Financial Performance Measures

For fiscal 2021, the portion of the annual incentive bonus derived from financial performance goals was based on the achievement of adjusted net revenue and adjusted operating income measures. We chose these measures because we believe they motivate our executives to drive Company growth and profitability consistent with our strategic objectives.

To reflect performance above or below targets, adjusted net revenue and adjusted operating income have sliding scales that provide for annual incentive bonus payouts greater than the target bonus if results are greater than target (up to a maximum 200% payout) or less than the target bonus if results are lower than the target (down to a threshold of 25% of target payout, below which the result would be 0% payout).

In setting the business performance scales, the Committee considered target Company performance under the challenging board-approved annual financial and long-term strategic plans, and the potential payouts based on achievement at different levels on the sliding scale.

The targets were designed to be challenging while recognizing economic uncertainties existing at the time the goals were established, including the prospect of continued global macroeconomic, retail and consumer headwinds such as inflationary pressures and global supply chain challenges, as well as the ongoing impact of the COVID-19 pandemic.

 

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Financial Performance Goals

Adjusted Net Revenue

For the NEOs, 40% of the financial performance goals, which accounts for 50% of the overall Annual Incentive Bonus Plan payout, is based on a consolidated adjusted net revenue goal. The payout for each component ranges from 0% to 200%. The threshold, target, and maximum criteria and actual results for adjusted net revenue for fiscal 2021 were as follows:

ADJUSTED NET REVENUE(1)

(1) The performance measures under the Annual Incentive Bonus Plan that were approved at the beginning of the performance period provided for certain non-GAAP adjustments so that the performance measures would more consistently reflect underlying business operations than the comparable GAAP measures. The fiscal 2021 consolidated net revenue result excludes foreign currency fluctuations and the 53rd week.

Adjusted Operating Income

For the NEOs, 60% of the financial performance goals, which accounts for 50% of the overall Annual Incentive Bonus Plan payout, is based on a consolidated adjusted operating income goal. In fiscal 2021, consolidated adjusted operating income equaled the total of all business units’ operating income less total unallocated corporate expenses. The threshold, target, and maximum criteria and actual results for fiscal 2021 adjusted operating income for fiscal 2021 were as follows:

ADJUSTED OPERATING INCOME(1)

(1) The performance measures under the Annual Incentive Bonus Plan that were approved at the beginning of the performance period provided for certain non-GAAP adjustments so that the performance measures would more consistently reflect underlying business operations than the comparable GAAP measures. The fiscal 2021 consolidated operating income result excludes foreign currency fluctuations and the 53rd week.

Individual Performance Factor

The IPF is weighted at 50% of the total payout under the Annual Incentive Bonus Plan and is comprised of the five elements set forth in the table below. The profit-positive element consists of goals that are purely quantitative, and the people-positive and planet-positive elements consist of goals that reflect a combination of qualitative and quantitative factors. We believe that each element plays an important role in contributing to our success and creating shareholder value.

 

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Element Weight     Payout
Range
  Goals   Rationale
People
(Common goals shared by all NEOs with performance results varying by individual)
      20%          0-200%      

     BIPOC Retention Rate*: ≥90%

     Mentorship Program: Serve as a mentor to BIPOC mentees with a meaningful time commitment demonstrated through monthly group meetings with all mentees and monthly individual meetings with each mentee

     Inclusive Leadership Survey linked to Mentorship Program: Average score >3 on scale of 1-5

●     One Elective Activity: Demonstrate leadership in an elective activity that builds inclusive leadership capability such as serving as an executive sponsor for a Starbucks Partner Network

      Our people-positive vision is to cultivate an inclusive environment where everyone belongs. We believe the strength, diversity, and inclusiveness of our workforce are significant contributors to our success as a global brand.
Planet
(Common goals shared by all NEOs)
  20%     0-200%  

     Dairy: farm-level methane reduction

     Coffee: Narino Colombia supply chain pilot

     Reusables: personal cup solutions

     Plant Based: increase plant-based choices

     Packaging: eliminate plastic straws

  We believe our planet-positive vision of giving back more than we take from the planet contributes to our primary objective of maintaining Starbucks standing as one of the most recognized and respected brands in the world. Further, we believe sustainability of our raw materials, especially coffee, is paramount to our business operations.
Profit
(Common goals shared by all NEOs, with Mr. Culver and Mr. Conway having additional international profit goals)
  20%     0-200%  

     Total Company Operating Margin: 16.0%

●     Total Company Comparable Store Sales: 21.3%

     Total Company Net New Stores: 1,229

Additional International Goals (Mr. Culver and Mr. Conway only):

     International Operating Margin: 20.5%

●     International Comparable Store Sales: 28.1%

    International Net New Stores: 1,174

  Our profit-positive efforts are aligned with our global long-term “Growth at Scale” agenda to deliver consistent revenue and income growth, through focus and discipline. The profit-positive element of the IPF reflects purely quantitative measures.
Living Our Mission and Values/Helping Others Succeed
(Goals vary by individual)
 

 

40%

    0-200%  

Varies by individual, but focused on:

     Creating a culture of warmth and belonging, where everyone is welcome.

     Delivering our very best in all we do, holding ourselves accountable for results.

     Acting with courage, challenging the status quo, and finding new ways to grow our company and each other.

     Being present, connecting with transparency, dignity, and respect.

  Living our Mission and Values enables our partners to deliver an elevated Starbucks Experience to our customers every day.
Strategic and Operational Goals
(Goals vary by individual)
        0-200%   Varies by individual, tied to the NEO’s primary areas of responsibility   Individual strategic and operational goals directly tied to the NEO’s primary areas of  responsibility are important to driving sustainable growth and value creation.
* BIPOC refers to Black, Indigenous, and People of Color. BIPOC retention is measured using a fiscal year-to-date retention metric and monitors the retention of BIPOC partners who were under an NEO’s functional hierarchy (reporting up through an NEO’s organization) at the beginning of the fiscal year and who remained employed with Starbucks throughout the fiscal year. A partner does not need to report to an NEO’s organization at the end of the fiscal year to be counted as retained, so long as they are still an active Starbucks partner. Mr. Conway did not have a BIPOC goal given his oversight of international licensed stores.

With respect to the ceo’s IPF, his individual performance goals for fiscal 2021 were set in October 2020 in collaboration with the independent members of the board. At the Compensation Committee’s November 2021 meeting, during a session at which the ceo was not present, the Committee determined that the ceo’s progress against his previously identified individual performance goals warranted an IPF of 102%. This IPF payout factor was likewise approved by the independent members of the board.

 

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EXECUTIVE COMPENSATION

For each of the NEOs other than the ceo, the ceo makes IPF recommendations to the Compensation Committee, based on each NEO’s annual performance, and the Compensation Committee approves a payout between 0-200%. At the Committee’s November 2021 meeting, the ceo evaluated the performance of the other NEOs and presented the results of those evaluations to the Committee for consideration. The evaluations included an analysis of the executives’ performance against their previously identified individual performance goals. The Committee concurred with the ceo’s recommendation for annual bonus payouts for Ms. Ruggeri, Mr. Culver, Mr. Conway, and Ms. Gonzalez, which are set forth in more detail below. Mr. Grismer and Ms. Brewer ceased employment with the Company in May 2021 and February 2021, respectively. Mr. Grismer received a prorated target bonus payout for fiscal 2021 in consideration of his efforts to ensure an orderly transition with respect to the duties of the chief financial officer role, and to provide additional strategic planning support as a special advisor to Mr. Johnson through his retirement, and Ms. Brewer was not eligible to receive payouts under the Annual Incentive Bonus Plan.

The key results influencing the Committee’s decisions on the individual performance category portion of the cash bonus award for the NEOs are summarized on the next page. As described in more detail, our shared planet-positive goals were achieved at target while our profit-positive goals were achieved above target, and our NEOs fell just short of our rigorous people-positive goals, while exceeding their individual goals tied to our Mission and Values and strategic and operational priorities. In fiscal 2021, Starbucks launched a mentorship program to connect BIPOC partners to senior leaders, offered foundational inclusion and diversity learning modules, and embedded anti-bias content into all hiring, development, and performance assessment toolkits. We enhanced our tools for tracking internal talent advancement and opportunity, and continued to work closely with our Partner Networks to better understand and support the experiences of our partners and further develop them as leaders.

 

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Kevin R. Johnson: 102% Individual Performance Factor

Pillar   Weight   Elements   Achievements   Compensation
Decision
People   20%   BIPOC retention rate ≥ 90%   88% retention rate (on a company-wide basis)  
    Demonstrated leadership in diversity activities and related employee feedback (Average Score >3 on scale of 1-5)   Launched an inclusion and diversity Executive Council that meets quarterly and includes all U.S.-based executive vice presidents and above to amplify the accountability of the executive leadership team (“ELT”) to be engaged and shape the agenda in partnership with our chief inclusion & diversity officer. Launched a quarterly connection with the leaders of all Starbucks Partner Networks in a leadership roundtable to connect ELT members to the feedback, suggestions, and experiences of our BIPOC partners; 4.46 employee feedback score  
    Mentor BIPOC partners with monthly mentoring circles and 1:1s   Successfully mentored BIPOC partners through monthly mentoring circles including all mentees and monthly individual 1:1s with each mentee  
Planet   20%   DAIRY: farm-level methane reduction   Sustainable dairy initiative pilot farm selected, to begin testing in fiscal 2022. Dairy Practices Program assessment and premiums model drafted and aligned with co-ops for fiscal 2022 on-farm process testing.  
    COFFEE: Narino Columbia supply chain pilot   Pilot launched.  
    REUSABLES: personal cup solutions   Personal cups and For Here Ware re-launched in all markets except Canada. Reusable tests proceeding in U.S., EMEA, and Asia.  
    PLANT BASED: increase plant-based choices   Plant-based introductions highlighted by oatmilk cold espresso and promotion in China and the U.S.  
    PACKAGING: eliminate plastic straws   U.S. (final market) rolled out polyhydroxyalkanoate straws beginning in September 2021.  
Profit   20%       Total Company operating margin overachieved significantly, representing exceptional performance, while total comparable store sales and total net new stores missed target by a narrow margin, even with the impact of the ongoing COVID-19 pandemic.  
    Total Company Operating Margin: 16.0%   Total Company Operating Margin: 17.9%  
    Total Company Comparable Store Sales: 21.3%   Total Company Comparable Store Sales: 20.1%  
    Total Company Net New Stores: 1,229   Total Company Net New Stores: 1,173  
Living Our Mission and Values/ Helping Others Succeed/ Strategic and Operational Goals   40%   Transform the leadership team for the future   Made significant progress reshaping the leadership team to backfill talent and strengthened the team on the dimensions of trust, transparency, and teamwork. 50% of executive leadership transitioned into their new role in the past 12-18 months. Helped to create many shared experiences that build common language and trust, and established a very good team dynamic.  
    Progress on people-positive agenda at the leadership level   Launched a systematic way to connect quarterly with the leaders of all Partner Networks in a leadership roundtable with the ELT members in attendance. This has better connected ELT members to the feedback, suggestions, and experiences that are shared by partners who create community with and represent the needs of our BIPOC partners.  
    Progress toward our long-term sustainability goals  

In addition to progress against the goals described above:

(1) Made significant progress implementing on farm “precision agronomy” programs to reduce overall carbon impact in coffee.

(2) In partnership with World Wildlife Fund, we launched a program called Greener Stores that goes beyond LEED certification to include store operations. 2,317 stores have been third-party certified to this standard.

(3) Construction is underway on China Innovation Park outside Shanghai, which we believe will be the most environmentally sustainable coffee roasting plant in the world driven by new roasting technology.

 
   

Strategic

Support board in ceo succession planning

  Worked closely with the chair of the Compensation Committee to develop internal succession plan, with significant progress made this year.  
   

Operational

Operationalize Starbucks Global License Framework

  Developed international licensed market strategy, focused on clarity of expectations, visibility to performance versus expectations, and accountability from licensees and Starbucks.  
 
Payout Range             

2022 PROXY STATEMENT    67


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EXECUTIVE COMPENSATION

The tables below set forth the scores and achievements of our other NEOs who remained eligible to participate in the Annual Incentive Plan for fiscal 2021. For the individual NEOs other than Mr. Johnson, we have not included their planet-positive scores and achievements or their profit-positive scores and achievements in these tables (except in the case of Mr. Culver and Mr. Conway) as they had the same goals and achievements as Mr. Johnson. Mr. Culver and Mr. Conway’s profit-positive scores and achievements are included as they had additional international profit-positive goals.

Rachel Ruggeri: 104% Individual Performance Factor

Pillar   Weight   Elements   Achievements   Compensation
Decision
People   20%   BIPOC retention rate ≥ 90%   88.7% retention rate  
    Demonstrated leadership in diversity activities and related employee feedback (average score >3 on scale of 1-5)   Drove inclusion through monthly experiential activities including utilization of the To Be Welcoming course curriculum, books, articles, and webinars, followed with reciprocal learning and conversation with mentorship circle; 4.88 employee feedback score  
    Mentor BIPOC partners with monthly mentoring circles and 1:1s   Successfully mentored BIPOC partners through monthly mentoring circles including all mentees and monthly individual 1:1s with each mentee  
Living Our Mission and Values/ Helping Others Succeed/ Strategic and Operational Goals   40%   Promote inclusion and diversity and organization effectiveness   Increased focus on creating an equitable, diverse, and inclusive work environment through educating and building understanding, cultivating relationships, and recruiting talent, and developing talent for future career growth.  
        Conducted a comprehensive organizational health assessment to inform additional efforts to enhance organizational effectiveness in Finance.    
   

Strategic

Provide financial thought leadership

  Provided financial thought leadership for the growth and optimization of digital customer engagement, expanded partner investments, improved store-level productivity, new product development, enhanced environmental sustainability, and the innovation and evolution of our retail concepts.    
   

Operational

Improve operating margin, financial leverage capital efficiency, customer and partner interactions, and resource allocation

  Elevated and sharpened business insights to sustain business recovery, drive continued improvements in enterprise operating margin and capital efficiency, and normalize financial leverage.    
      Continued implementation of Business Transformation and Shared Services initiatives to build new capabilities, improve processes, and achieve targeted improvements in customer and partner experience, service quality, and productivity.    
        Further refined operational planning discipline to improve the efficiency and effectiveness of resource allocation.    

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John Culver: 116% Individual Performance Factor

Pillar   Weight   Elements   Achievements   Compensation
Decision
People   20%   BIPOC retention rate ≥ 90%   86.5% retention rate  
    Demonstrated leadership in diversity activities and related employee feedback (average score >3 on scale of 1-5)   Executive Sponsor of the Welcoming Refugees Alliance, participated in family meetings with the Armed Forces Network, including coffee connects, and a board member for The Mission Continues (an organization to support veterans and their families within local communities in the US); 4.81 employee feedback score  
    Mentor BIPOC partners with monthly mentoring circles and 1:1s   Successfully mentored BIPOC partners through monthly mentoring circles including all mentees and monthly individual 1:1s with each mentee  
Profit (Common goals shared by all NEOs, with Mr. Culver and Mr. Conway having additional international profit goals)   20%   See total company profit goals above.   See total company profit achievements above.  
    Additional International Goals:   Exceeded international operating margin goal and net new store growth goal despite missing comparable store sales target, while navigating COVID closures.  
    International Operating Margin: 20.5%   International Operating Margin: 21.3%  
    International Comparable Store Sales: 28.1%   International Comparable Store Sales: 15.6%  
    International Net New Stores: 1,174   International Net New Stores: 1,264  
Living Our Mission and Values/ Helping Others Succeed/ Strategic and Operational Goals   40%   Develop COVID relief and recovery plans; talent development at the leadership level   Established a COVID Relief Framework that helped provide licensee specific relief due to the impacts of the pandemic.  
        Shared best practices and COVID recovery models across markets to enable rapid adoption of new store safety procedures and digital capabilities, building increased resiliency into global retail execution.  
        Sponsored the development of key leaders and provided mentorship and support for executive leadership.  
    Strategic   Accelerating growth of international ready to drink portfolio.  
    Grow market share and innovate   Seized opportunities in consumer product goods, outperforming the market, while growing share, and reimagining the future of foodservice by developing a Starbucks experience that is safe, touchless, and effortless.  
    Promote Partner Promise globally   Embedded Partner Promise globally, bringing consistent language for what it means to be a partner, with clear accountability for leaders to deliver a welcoming environment for all.  
   

Operational

Execute on International Retail License Business Acceleration Plan and operationalize Starbucks Global License Framework

  Executed the International Retail License Business Acceleration Plan with an emphasis on licensee economics and organizational capabilities.  
      Operationalized Starbucks Global License Framework ensuring licensees deliver the Starbucks Experience in a clear, consistent, and enduring way while profitably growing the brand.  

2022 PROXY STATEMENT    69


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EXECUTIVE COMPENSATION

Michael Conway: 106% Individual Performance Factor

Pillar   Weight   Elements   Achievements   Compensation
Decision
People   20%   Not applicable, as Mr. Conway oversees international licensed stores   Not applicable  
    Demonstrated leadership in diversity activities and related employee feedback (average score >3 on scale of 1-5)   Executive sponsor of the Indian Partner Network and Black Partner Network; supported the Indian Partner Network in relief efforts associated with the COVID outbreak in April 2021; supported EMEA’s first Black Partner Network; 4.5 employee feedback score  
    Mentor BIPOC partners with monthly mentoring circles and 1:1s   Successfully mentored BIPOC partners through monthly mentoring circles including all mentees and monthly individual 1:1s with each mentee  
Profit (Common goals shared by all NEOs, with Mr. Culver and Mr. Conway having additional international profit goals)   20%   See table for Mr. Culver above.   See table for Mr. Culver above.  
Living Our Mission and Values/ Helping Others Succeed/ Strategic and Operational Goals   40%   Foundation board service, support COVID relief overseas, and establish diverse partner networks overseas   Active and engaged member of The Starbucks Foundation Board.  
      Supported Indian Partner Network in relief effort with COVID outbreak in April 2021.  
      Guest speaker at several enterprise development forums and ensured that EMEA’s first Black Partner Network launched.  
   

Strategic

Execute business acceleration plan with an emphasis on licensee economics and organizational capabilities

  Operationalized licensing strategy including key actions needed to realize long term accelerated growth; secured funding for capability building investments.  
    Continue to pursue streamline strategy through business development and key market transitions   Completed transition of Korea to a fully licensed market.  
    Enhanced alignment between global licensees and Global Coffee Alliance to realize share of global coffee addressable market   Established cross-channel governance approach in EMEA for petrol channel approvals.  
   

Operational

Establish cross functional international leadership team, continue implementation of Business Transformation and Shared Services initiatives, advance and complete licensee

initiatives and improve resource allocation

  Established effective, cross-functional international leadership team to drive and support business.  
      Continued implementation of Business Transformation and Shared Services initiatives to build new capabilities, improve processes, and achieve targeted improvements in customer and partner experience, service quality, and productivity.  
      Further refined operational planning discipline to improve the efficiency and effectiveness of resource allocation.  
      Completed the development and rollout of Global Licensed Framework standards.  
        Supported the execution of the digital acceleration roadmap with licensees.  
        Supported the reset of licensed model to realize accelerated growth with a focus on key markets.  

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EXECUTIVE COMPENSATION

Rachel A. Gonzalez: 110% Individual Performance Factor

 

Pillar   Weight   Elements   Achievements   Compensation
Decision
People   20%   BIPOC retention rate ≥ 90%   86.5% retention rate  
    Demonstrated leadership in diversity activities and related employee feedback (average score >3 on scale of 1-5)   Executive sponsor of Hora del Café and NEXT; Sponsor of Hispanic Bar Association; 5.0 employee feedback score  
    Mentor BIPOC partners with monthly mentoring circles and 1:1s   Successfully mentored BIPOC partners through monthly mentoring circles including all mentees and monthly individual 1:1s with each mentee  
Living Our Mission and Values/ Helping Others Succeed/ Strategic and Operational Goals   40%   Address executive compensation shareholder concerns; promote collaboration with respect to ESG matters; and improve stakeholder engagement and address material concerns   Worked closely on executive compensation matters, including defense of say-on-pay advisory vote during a year of transitioning both executive compensation and investor relations leaders.  
      Worked closely with Public Affairs, including public policy team to drive greater cohesion and collaboration on ESG matters.  
      Improved stakeholder engagement and addressed material concerns.  
   

Strategic

Support acceleration of licensee growth

  Supported acceleration of licensee growth with a focus on economic health and building and delivering digital engagement.  
   

Operational

Deliver Center of Excellence model in the ethics and compliance and data privacy space and refine enterprise risk management process

  Helped to deliver Center of Excellence model in the ethics and compliance and data privacy space and effectively built out teams to deliver against this model, where business needs drove adoption of this mode.  
      Positioned Global Safety & Risk team to become a hub for enterprise risk owners in assessing, mitigating, planning, and resiliency in the face of risk.  

Fiscal 2021 Annual Cash Incentives Earned

Annual cash incentives earned are aligned with Starbucks fiscal 2021 performance and also reflect individual contributions.

The table below shows the fiscal 2021 actual bonus levels for each component of the Annual Incentive Bonus Plan, based on achievement of the performance metrics and bonuses earned, which are also disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.

Fiscal 2021 Annual Incentive Bonus Plan

                            Bonus Earned
                             
Named Executive Officer       Payout on
Consolidated
Adjusted
Operating
Income
(60% Weighting)
      + Payout on
Business Unit/
Consolidated
Adjusted
Net Revenue
(40% Weighting)
      = Financial
Performance
(% of Target)
Weighted 50%
      + Individual
Performance
Factor
(% of Target)
Weighted 50%
      = (% of Target)               $
Kevin R. Johnson   200%     95%     158%     102%     130%   $4,030,000    
Rachel Ruggeri   200%     95%     158%     104%     131%   $1,053,409   *
John Culver   200%     95%     158%     116%     137%   $1,941,595   *
Michael Conway   200%     95%     158%     106%     132%   $1,133,360   *
Rachel A. Gonzalez   200%     95%     158%     110%     134%   $   971,500    
                                     
   
* Ms. Ruggeri, Mr. Culver, and Mr. Conway each received promotions and related compensation increases during fiscal 2021. The bonus earned reflects the fiscal 2021 salary and target annual incentive opportunity for each of Ms. Ruggeri, Mr. Culver, and Mr. Conway, prorated and weighted based on the amount of time in each role before and after their respective promotions. Ms. Brewer’forfeited her award under the Fiscal 2021 Annual Incentive Bonus Plan in connection with her departure from Starbucks in March 2021.

2022 PROXY STATEMENT    71


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EXECUTIVE COMPENSATION

Leadership Stock Plan

Fiscal 2021
Design
      ANNUAL EPS
PERFORMANCE
TARGETS AVERAGED
OVER 3 YEARS
      3-YR relative TSR vs S&P
500
(upward or downward
modifier of 25%)
      ACHIEVEMENT OF
INCLUSION & DIVERSITY
GOALS
(upward or downward
modifier of 10%)
    TIME-BASED RSUs
                       
          60% PRSUs           40% TIME-BASED RSUs

Overview

In fiscal 2021, we granted each of our NEOs who was employed by the Company prior to the beginning of the year long-term performance-based compensation in the form of time-based RSUs and PRSUs. Ms. Ruggeri was not eligible to receive awards under the Leadership Stock Plan until fiscal 2022.

Time-based RSUs vest annually in equal installments of 25%, commencing on the first anniversary of the grant date. PRSUs are earned only to the extent pre-established performance goals are met. Both time-based RSUs and PRSUs include dividend equivalent rights payable at the same time as the underlying shares are earned. The values of the long-term incentive awards reflected in the table below were designed to be competitive to market, recognize the personal performance of each executive in the fiscal year prior to the November grant date (as applicable), and to further increase the percentage of total pay that is variable and at-risk based on Starbucks financial performance. The table below reflects the value of annual long-term incentive awards approved by the Committee for our NEOs in each of the last two fiscal years under the Leadership Stock Plan. We determined the number of PRSUs to be delivered by dividing 60% of the value approved by the Committee by the closing price of our stock on the grant date. For time-based RSUs, we divided 40% of the value by the closing price of our stock on the grant date. Because the value approved by the Committee is approved in advance of the awards being granted and may use different assumptions than are applied to the awards for accounting purposes, the value of awards approved by the Committee may be different from the grant date fair value of equity awards as disclosed in the Summary Compensation Table.

Value of Annual Long-Term Incentive Compensation Awards

Named Executive Officer       Granted in
Fiscal 2021
        Granted in
Fiscal 2020
        % Change
Kevin R. Johnson   $ 14,500,000     $ 13,500,000     7.4%
Rachel Ruggeri(1)   $ 875,000       N/A     N/A
John Culver(2)   $ 6,000,000     $ 5,250,000     14.3%
Michael Conway   $ 3,500,000     $ 3,500,000     0%
Rachel A. Gonzalez   $ 3,500,000     $ 3,500,000     0%
Patrick J. Grismer   $ 4,500,000     $ 4,500,000     0%
Rosalind G. Brewer(2)   $ 4,500,000     $ 5,250,000     -14.3%
   
(1) Pursuant to the offer letter entered into by Ms. Ruggeri and the Company in January 2021, the Compensation Committee granted Ms. Ruggeri a $1 million promotional equity award in connection with her promotion to executive vice president and chief financial officer. Such award, which consists of time-based RSUs, is in addition to the amount stated above for Ms. Ruggeri in the Leadership Stock Plan section. In determining the value of Ms. Ruggeri’s promotional equity award, the Committee considered her prior performance, the significance of her new role with the Company, and market considerations.
(2) The value of Ms. Brewer’s award in fiscal 2020 included an increase to recognize her performance and efforts to support our partners during the COVID-19 pandemic while the fiscal 2021 award value reflected her regular target value. In November 2020, the Compensation Committee approved an increase of $1,500,000 in the target value of his annual awards under the Leadership Stock Plan for Mr. Culver in consideration of his prior performance, the significance of his role with the Company, and market considerations.

Fiscal 2021 Time-Based RSUs

Time-based RSUs represented 40% of the total award under the Leadership Stock Plan, designed to support executives’ stock ownership and encourage retention. Time-based RSUs were granted to our NEOs on November 11, 2020, and represent 40% of the value shown above for fiscal 2021. Time-based RSUs vest annually in equal installments of 25%, commencing on the first anniversary of the grant date. RSUs are an important tool for us to retain and incentivize our highly sought after NEOs since the value of the awards will be delivered to our NEOs over a four-year period, subject to continued service with us, and become more valuable as our stock price increases, which benefits all shareholders. The time-based RSUs granted to the NEOs in fiscal 2021 are disclosed in the Fiscal 2021 Grants of Plan-Based Awards Table on page 81.

Fiscal 2021 PRSUs

Consistent with the feedback that we have received from shareholders and our focus on strategic performance that will drive longer-term shareholder returns, the EPS metric is measured over a three-year period, and a relative TSR modifier can impact payout of PRSUs upward or downward by 25%. In addition, starting with the fiscal 2021 PRSUs, we are holding our senior leaders collectively accountable for meeting a 3-year inclusion and diversity goal, which focuses on improvement in Black, Indigenous, and LatinX representation at the manager level and above by 5% or more by 2023. The representation metric will operate as a modifier to the payout of the fiscal 2021 PRSU award.